Contradictory data hints the GTA property market is down from last year’s sizzling highs

George Carras – Toronto Star

How best to describe the GTA new-home market at the start of 2015?

Well, it’s complicated. Sales are down, but prices are up.

There were 1,939 new homes sold across the region in January. While that’s tracking 3% above the market’s 10-year average, it represents a decline of 12% from last year.

Sales of new highrise homes (a category that includes apartment condominiums, lofts and stacked townhomes) declined 25% from last year, as new launches in 2015 lag the pace of those in 2014.

On the other side of the market spectrum, sales of new lowrise homes (a category that includes detached, semi-detached and townhomes) were up a modest 1% from last year.

Don’t get too excited, though, as the price of a new lowrise home increased by 8.3% last month, hitting a new record high of $710,628. With the increase in lowrise prices, the gap separating the cost of a lowrise and highrise home also reached a new record in January: $266,123.

Interest rates are on the decline in 2015 following the Bank of Canada’s decision in January to respond to the recent sharp drop in oil prices. Driving the interest rate slash was the anticipated negative impact that lower oil prices may have on growth and inflation in Canada.

If you’re looking for a bit of economic good news in the coming months, keep an eye on new highrise construction starts in the GTA. Strong highrise sales last year meant that 74 projects — comprising 18,488 units — were more than 70% sold in pre-construction status at the end of 2014. That represents approximately $6.7 billion worth of new condominium developments that are likely going to start construction this year.

February 2015 marks the 10-year anniversary of the launch of the province’s growth plan for the Greater Golden Horseshoe. The plan introduced a greenbelt, pushed for development to go up, not out, and spurred an important discussion about the future of this region we call home.

Grasping the impact of these intensification policies on property markets today is vital to understanding where the region will be headed over the next decade.

While housing markets respond to interest rates and monetary policy, make no mistake about it: it’s the land-use policies of today that are fundamentally reshaping the region we’re building for tomorrow.

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Contact Laurin Jeffrey for more information – 416-388-1960

Laurin Jeffrey is a Toronto real estate agent with Century 21 Regal Realty.
He did not write these articles, he just reproduces them here for people who
are interested in Toronto real estate. He does not work for any builders.
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