The supply shortage that helped drive up the average price of a newly built, single-family home 23 per cent year-over-year in December, to $1.23 million, will continue, said Dave Wilkes, who took over this month as CEO of the Building and Land Development Association (BILD).
The market will continue to tilt to condos, which dominated sales and saw a 41.3 per cent price rise in December to $716,772, compared to the same month last year, when they cost $507,128 on average, he said.
The number of single-family homes sold last year, 7,714 — including detached, semi-detached and town houses — was down 58 per cent from 2016 and 50 per cent from the 10-year average, according to BILD statistics.
The 36,429 condos that sold, however, marked a steep rise of 66 per cent above the 10-year average — 25 per cent more sales than 2016.
Wilkes said that BILD plans to make the issue of housing affordability prominent in the provincial and municipal elections this year.
“We need to ensure we have the right kinds of homes and we have the right policies to allow the supply to come on the market. We need to ensure we are doing the right things to ensure the products that are being built are affordable,” he said.
Newly built condo sales were also down dramatically in December — 844, compared to 2,276 last December, a 10-year record.
Wilkes blamed much of the shortage of new homes on the market on outdated municipal zoning bylaws that fail to support the province’s anti-sprawl land use policies.
Municipalities are mandated to update zoning but the province doesn’t enforce those rules, delaying construction as developers appeal the restrictions around the types of buildings they can put on that land, he said.
“We are in a period of change in the GTA. It’s a very exciting time, but we’ve got to get the policies aligned to make sure the approval processes accommodate the growth we’re demanding,” said Wilkes. “We’ve got to make sure we’re providing options for people and responding to the demand.”
He said BILD will be calling on governments to commit to streamlining the building approvals process; updating zoning across the region to support intensification. It also wants a public education campaign explaining its intensification policies.
The supply issues on the new construction front continues to influence the re-sale market, said the president of the Toronto Real Estate Board (TREB) on Monday.
The fact that re-sale condo demand remains strong despite 9.8 per cent more listings in the fourth quarter of last year, “points to the fact that we still do have a supply problem in the GTA that needs to be addressed to ensure the long-term sustainability of the marketplace,” said Tim Syrianos in a news release.
The average price of a re-sale condo in the fourth quarter rose about 18 per cent year over year to $515,816, TREB reported.