Newly built home sales hit record lows in the GTA in 2023

More than 6,000 fewer newly built GTA homes were sold in 2023 compared to 2022, a new report by the Building Industry and Land Development Association (BILD) has found. With just 19,252 sales, the total new home sales for 2023 was 45 per cent below the 10-year average of 35,132.

New home sales were especially low in December — only 554 homes sold, 67 per cent below the 10-year average. That’s only two homes more than were sold in December of 2022, which was the second lowest December for monthly new sales after December 2008, during the recession. 

“With current interest rates we are experiencing a hurry up and wait sales environment as potential buyers sit on the sidelines,” said senior vice president of communications and stakeholder relations at BILD Justin Sherwood. “Given that housing starts lag pre-construction sales by as much as two years, we can expect that the low level of sales in 2023 will result in lower housing starts in the future.”

While the total new home remaining inventory decreased to 20,252 units in December — 16,850 condominium apartment units and 3,402 single-family dwellings, a combined inventory level of nine and half months — it’s still a nine-year high, the highest inventory level since 2015. But the statement from BILD noted that builders added very little inventory to the market in December. 

Year-to-date, it was condominium apartments that dragged down sales: 13,383 newly built units sold in 2023, down 36 per cent from the previous year. There were 5,869 newly build single family home sales in 2023, an increase of 34 per cent year-over-year.

High inventory and declining sales have put downward pressure new build home prices in the GTA. The benchmark price for new build condominium apartments was down 7.5 per cent to $1,047,288 over the last 12 months. And the benchmark price for new single-family homes was down 8.5 per cent to $1,604,977 — though benchmark prices for both types of homes increased in December compared to the previous month. 

With interest rate cuts on the horizon, experts still predict a slow recovery for new home sales in 2024.

“Both new home buyers and builders remained on the sidelines in December, lacking the confidence to re-engage,” research manager with Altus Group Edward Jegg said. “As a result, new home sales were sparse and the likelihood for an appreciable uptick in the first half of 2024 remains dim.”

Article exclusive to STREETS OF TORONTO