GTA New Home Sales "Notably Low," Down 60% From Last October

New home sales in the Greater Toronto Area (GTA) saw a sharp decline this October, plunging by 60% year-over-year, according to the Building Industry and Land Development Association (BILD). A total of 765 new homes were sold across the region, a slight improvement from September's 591 but significantly below historical norms. This downturn underscores the persistent challenges facing the real estate market despite a strong demand for housing.

The market for new single-family homes, which includes detached, semi-detached, and townhouses, recorded only 177 sales. This figure is 85% lower than the 10-year October average. Similarly, sales of new condominium apartments, which include both high-rise and stacked townhouses, totaled 588, marking a 50% drop compared to last October and falling 70% below the decade-long average.

High borrowing costs and elevated construction expenses are major factors driving the slowdown. Rising interest rates have made mortgages less affordable, and ongoing inflation in building materials and labor has contributed to the high costs of new homes. The benchmark price for new single-family homes dropped by 4.9% from last year, settling at $1,549,416, while new condo prices also experienced a modest 1.6% decrease to $1,006,256.

Another contributing factor is the limited availability of affordable housing options. Industry experts warn that the continued sluggishness in new home sales could negatively impact housing supply in the coming years, potentially leading to shortages from 2027 to 2029. Developers face regulatory and financial barriers, making it challenging to deliver new housing at a pace sufficient to meet demand.

While some analysts remain hopeful for a recovery in the broader housing market, the new home sector's struggles highlight systemic issues that require urgent attention. Solutions such as reducing government-imposed fees and streamlining construction approvals could help alleviate some of the bottlenecks.

Despite these challenges, October’s modest month-over-month improvement indicates that the market may be slowly adjusting. However, experts stress that significant reforms are needed to stabilize prices and ensure the region can meet future housing demands effectively.