After years of soaring prices — home buyers are sitting firmly on the fence in Canada’s biggest real estate market.
Altus group says Greater Toronto Area new home sales fell 40 per cent compared to the previous year to just over 25,000 —which is the lowest level since Altus Group started tracking the data in 2000. Single-family homes were the biggest contributor, with a 50 per cent drop.
New condo sales fell 38 per cent. More condo buyers could get priced out of the market
considering the average asking price in the GTA has jumped 57 per cent in the past 2 years. But Altus Group expects condos to be the go-to type of residence in the absence of affordable housing options and purpose-built rentals.
“Real estate investment, in general, had a bit of a quieter year after an exceptional 2017,” says Matthew Boukall, vice president of data solutions at Altus Group, in the report.
“We expect the downturn will be short-lived, with the rebound in home buying intentions, the pause in interest rate increases and continued interest in commercial real estate as an investment asset class.”
Altus group says homebuying intentions are up as more renters get ready to enter the market. They plunged in 2017 when home prices really went through the roof.
More than half of first-time buyers got a helping hand from family with their downpayment. Half of recent buyers were first-time buyers.
Investment property sales are down from the record set in 2017. But at $21.1 billion, it’s still the 2nd highest ever recorded by Altus Group. The $155 million purchase by Starlight Investments in Scarbrough was a key contributor to record apartment sales.
Altus group expects investment activity to remain strong in 2019 as Toronto and Canada continue to be in demand for investors.