New home sales in the GTA hit new low, outlook is looking bleak as costs rise
Experts constantly call for greater supply of new homes to meet demand and address affordability constraints.
But for one of Canada’s largest housing markets, the challenges being faced by developers means supply will continue to be constrained as the cost of building homes escalates, according to a report from the Building Industry and Land Development Association (BILD).
Low sales in the Greater Toronto Area in December highlighted what was a tough year for the new homes market in 2024.
There were just 310 new homes sold in the GTA last month, down 46% year-over-year and 80% below the 10-year average according to Altus Group, the official data provider to BILD. Whole-year sales were down 47% year-over-year and 69% below the 10-year average.
“2024 will go down as a historic year, with December’s new home sales hitting their lowest point in nearly 40 years and the whole year producing the lowest annual total since 1990,” said Edward Jegg, Research Manager at Altus Group. “As 2025 begins, new home buyers remain unwilling to re-enter the market despite lower mortgage rates, falling prices, and elevated inventories.”
Benchmark prices were also under pressure in December with both single-family homes and condominium apartments lower compared to the previous year.
The benchmark price for new condominium apartments was $1,018,170, down 2.8% over the last 12 months, while for new single-family homes the benchmark was $1,551,228, down 3.4% over the last 12 months.
BILD is calling for urgent action to address the growing problem.
“We are literally watching the foundation of the next housing crisis being laid today. December’s new home sales and the low new home sales seen throughout 2024 in the GTA illustrate the problem the region is facing adding new housing supply,” said Justin Sherwood, SVP of Communications, Research, and Stakeholder Relations. “While the resale market has shown some signs of life thanks to lower rates, new builds are continuing to face a ‘cost to build’ challenge.”
Sherwood explained that skyrocketing construction costs, soaring financing rates, and increasingly high municipal fees over the last five years have made it financially impossible to build homes that the market can, and is willing to, absorb at present prices.
“Sales have plummeted and housing starts are sliding - and will continue to follow the sales trajectory. Without immediate action from governments to reduce development charges and municipal fees, the future housing supply of the GTA is in peril,” he said.
