Sales of new homes in the Greater Toronto Area (GTA) hit near-record lows in January, with hesitant buyers staying out of the market despite a surplus of inventory, according to a report by the Building Industry and Land Development Association (BILD) on Friday.
The report, based on data from Altus Group, revealed that only 347 new homes were sold last month—marking a 40% drop year over year and 77% below the 10-year average.
“Despite a further Bank of Canada rate cut, abundant inventory, and falling prices, GTA new home buyers remain scarce,” said Edward Jegg, research manager at Altus Group.
Condos and Single-Family Home Sales Decline
Condominium sales, including units in low-, medium-, and high-rise buildings, saw a steep 58% decline from January 2023 and fell 88% below the 10-year average, with only 101 units sold.
Single-family home sales, which include detached, semi-detached, and townhouses (excluding stacked townhouses), also plummeted—falling 27% year over year and landing 63% below the 10-year average, with just 246 sales recorded.
Inventory Remains High Despite Price Drops
The number of available new homes remained unchanged from the previous month, with an inventory level of 14 months—above the healthy market benchmark of 9 to 12 months.
Despite the slowdown, prices have dropped significantly, making it an opportune time for buyers, according to BILD’s senior vice-president of communications, research, and stakeholder relations, Justin Sherwood.
With the spring market approaching, Sherwood noted that buyers have a rare opportunity, as new home prices have dropped by approximately 20% since the 2022 peak.
In January, the average price of new single-family homes fell 1.2% year over year, while condo prices decreased by 3.5%.
Why Are Buyers Holding Off?
Sherwood pointed out that multiple factors are contributing to buyer hesitation:
- High construction costs: Labour and material expenses remain elevated, keeping development costs high.
- Resale market competition: A surplus of resale condos has made pre-construction homes less appealing.
- Economic uncertainty: The looming possibility of U.S. trade tariffs has created caution among buyers.
- Interest rate speculation: Many are waiting to see if the Bank of Canada will introduce further rate cuts before making a purchase.
“From an inventory standpoint, conditions haven’t been this good since 2016, and from a price perspective, it’s the best market for buyers since 2019,” Sherwood concluded.
