New homes set record in July with prices for single family homes up almost 30%

As the pandemic goes on, the price of new construction homes continued to hit records in July with single-family homes leading the way. The benchmark price in that category, including detached, semi-detached and townhomes, soared 28.4 per cent year over year last month to an average of $1.52 million. The condo benchmark also climbed 10 per cent to $1.1 million on average, according to the Building Industry and Land Development Association (BILD) that represents homebuilders. Sales of newly built and pre-construction homes slumped, however. The 662 single-family homes that sold in July marked a 61-per-cent decline compared with last year’s extraordinary pandemic July period, putting them 21 per cent below the 10-year average.July’s 1,478 condo sales were down 26 per cent year over year and 11 per cent lower than the decade average, according to the figures compiled for BILD by Altus Group. It found that condo prices averaged a record $1,141 per sq. ft. in July in the Toronto area.This year to date, however, sales of single-family homes and condos remain above the 10-year average.“The pent-up demand and the race for space that we had experienced during the initial part of the pandemic, all of that demand has passed through the market. We didn’t see the same level of sales we saw last year,” said BILD CEO David Wilkes.“It was not only the typical slowing in July but as a result of the record-setting activity in the previous months there’s been a bit of a pause in the market,” he said.The remainder of the year will likely reflect a more traditional level of sales rather than the higher activity seen through the first part of the pandemic, said Wilkes.The problems in the housing market that existed prior to the pandemic and that were accelerated during COVID haven’t gone away, he said. Inventory levels of new construction and pre-construction homes for sale are approaching a “crisis point.”There is only about one month of inventory in single-family homes compared to a 10-year average of five to eight months’ inventory. In condos there is an inventory of about 4.1 months compared to a 10-year average of 8.7 months, said Wilkes. “We continue to just not have enough inventory and new builds coming on to facilitate the demand this region is seeing in new homes sales and that is a problem that was with us before the pandemic, through the pandemic, and has not gone away,” he said.Wilkes would not comment on federal party housing platforms but said he is pleased to see a consensus that we need to be building more housing.There needs to a collaborative effort among all levels of government to address the supply side of the housing affordability problem, said Wilkes. Designating land for growth, ensuring it is zoned appropriately, and removing red tape around housing approvals are ways of doing that. He also urged governments to guard against overtaxing new development, “which is already 25 per cent of the cost” of housing.Tess Kalinowski is a Toronto-based reporter covering real estate for the Star. Follow her on Twitter: @tesskalinowski

New homes set record in July with prices for single family homes up almost 30%

As the pandemic goes on, the price of new construction homes continued to hit records in July with single-family homes leading the way.

The benchmark price in that category, including detached, semi-detached and townhomes, soared 28.4 per cent year over year last month to an average of $1.52 million. The condo benchmark also climbed 10 per cent to $1.1 million on average, according to the Building Industry and Land Development Association (BILD) that represents homebuilders.

Sales of newly built and pre-construction homes slumped, however. The 662 single-family homes that sold in July marked a 61-per-cent decline compared with last year’s extraordinary pandemic July period, putting them 21 per cent below the 10-year average.

July’s 1,478 condo sales were down 26 per cent year over year and 11 per cent lower than the decade average, according to the figures compiled for BILD by Altus Group.

It found that condo prices averaged a record $1,141 per sq. ft. in July in the Toronto area.

This year to date, however, sales of single-family homes and condos remain above the 10-year average.

“The pent-up demand and the race for space that we had experienced during the initial part of the pandemic, all of that demand has passed through the market. We didn’t see the same level of sales we saw last year,” said BILD CEO David Wilkes.

“It was not only the typical slowing in July but as a result of the record-setting activity in the previous months there’s been a bit of a pause in the market,” he said.

The remainder of the year will likely reflect a more traditional level of sales rather than the higher activity seen through the first part of the pandemic, said Wilkes.

The problems in the housing market that existed prior to the pandemic and that were accelerated during COVID haven’t gone away, he said. Inventory levels of new construction and pre-construction homes for sale are approaching a “crisis point.”

There is only about one month of inventory in single-family homes compared to a 10-year average of five to eight months’ inventory. In condos there is an inventory of about 4.1 months compared to a 10-year average of 8.7 months, said Wilkes.

“We continue to just not have enough inventory and new builds coming on to facilitate the demand this region is seeing in new homes sales and that is a problem that was with us before the pandemic, through the pandemic, and has not gone away,” he said.

Wilkes would not comment on federal party housing platforms but said he is pleased to see a consensus that we need to be building more housing.

There needs to a collaborative effort among all levels of government to address the supply side of the housing affordability problem, said Wilkes. Designating land for growth, ensuring it is zoned appropriately, and removing red tape around housing approvals are ways of doing that. He also urged governments to guard against overtaxing new development, “which is already 25 per cent of the cost” of housing.

Tess Kalinowski is a Toronto-based reporter covering real estate for the Star. Follow her on Twitter: @tesskalinowski