Greater Toronto real estate can’t catch a break these days. The latest data from developer intelligence firm Altus Group and the regional developer group BILD GTA, shows Toronto new home prices slipped lower in May. Weak demand at this price level has pushed sales this year to the weakest level on record. It’s not for a lack of inventory, which has climbed to the highest level for the month in nearly a decade.
Greater Toronto new home prices slipped further last month. The benchmark, or typical, price of a single-family home fell to $1.61 million in May, down 7% from a year before. Condos did a little better at a benchmark price of $1.04 million, 5% lower over the same period. It’s still not exactly affordable, but both segments have dropped nearly 30% since hitting the peak a few years prior.
The price of a benchmark new home across Greater Toronto.
Source: Altus Group.
Demand for new homes across Greater Toronto at this price has never been weaker. New home sales fell 71% to just 936 in May, bringing year-to-date (YTD) sales 46% lower, with just 4,686 units sold this year. According to BILD GTA, YTD sales have fallen to the lowest level on record—30% lower than the previous low set in 2009.
Greater Toronto new home sales for the month and year to date for May.
Source: Altus Group.
Breaking down the inventory, weakness was consistent across the region. Sales of single-family homes fell 65% from last year, while condos dropped 75% over the period.
By itself, sales don’t tell the whole picture—low inventory could restrict the number of sales. That’s not the case across Greater Toronto, where inventory has reached a multi-year high. Total new home inventory climbed 33% over the past year to 20,427 units as of May. It’s the most inventory reported in May going back to 2016, nearly a decade ago and before the city’s prices made its rapid climb.
Considering the population growth rate, it’s surprising to see such soft demand for new homes. Though it aligns with the rising apartment vacancies, now higher than pre-pandemic levels. Either Greater Toronto’s population estimates have been generous, or young adults have reached the limit on how much they can pay.
