The 26 per cent decline in house sales year over year, but a six per cent rise in new house prices, is being blamed on a dwindling supply of enough serviced land to meet demand for new low-rise housing, as well as government fees and charges which, a recent study showed, account for more than 20 per cent of the cost of a new home.
New high-rise condo sales declined 33 per cent in May over a year earlier as developers held back launching new projects, according to figures released Wednesday by RealNet Canada Inc. on behalf of the Building Industry and Land Development Association. Average unit prices were down by two per cent to $431,955.
Most concerning about the May numbers is how far new home construction across the GTA has now fallen below historic norms, says George Carras, president of RealNet: Low-rise detached, semi-detached, townhome and rowhouse construction is now 33 per cent below 10-year averages.
High-rise condo sales were down by 22 per cent.
Housing affordability “will get worse before it gets better,” says Neil Rodgers, vice president of land acquisitions for Tribute Communities, noting that subdivision land prices have virtually doubled just in the last seven years in the face of provincial greenbelt and intensification policies.
Also impacting sales dramatically, on the new and the resale side, are tighter mortgage lending rules which have had a dramatic impact on first-time buyers.
Sales of homes in the price range, $400,000 or less, have slumped 18 per cent in the five months up to the end of May, says veteran economist Will Dunning who has done an in-depth analysis of the Toronto Real Estate Board home sales for Canada’s mortgage brokers.
Move-up home sales, from $400,000 to $2 million, are down just five per cent and homes over $2 million have held virtually steady, he found.
That may explain why GTA resale prices have continued to climb, says Dunning, with those higher-end sales propping up price gains.
Original Article
Source: thestar.com
Author: Susan Pigg
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