According to BuzzBuzzHome, the price of low-rise, new homes has increased over $13,000 in less than one month. That has placed the average price of a new home at a record high of $1,059,263. The main factors that have attributed to the climbing costs of new homes include lack of resale inventory, and limited supply of developable land.
The lack of inventory across the GTA has pushed resale prices up significantly.
Jason Mercer, Director for Market Analysis at TREB, stated that:
- The number of homes listed through brokerages was down since the same time last year
- Active Days On the Market is lower
- Price is up on average 13.6% for the first quarter, compared to the same time last year.
That indicates significant demand, regardless of housing type, but low-rise has seen the highest demand. The low supply of listings has aggravated many potential buyers, and prevented many from entering the market. The strong demand for resale homes directly related into double digit price growth, which also affected the price of new homes.
Personally, we’ve noticed a drop in the amount of offers properties are receiving, but that doesn’t indicate a reduced demand. Buyers are learning that they cannot underbid on a property in the hopes maybe getting a bargain.
Lack of developable land has also pushed new home prices up.
New homes have become increasingly scarce, while preconstruction condos are becoming more and more common. This shift is driven both by entry price, but also the lack of developable land. On a personal note, we had several buyers lined up for the launch of the new low-rise homes north of Dundas in Oakville. Over 50,000 people registered for the projects built by Minto, Branthaven, Great Gulf, and Mattamy, and they sold out within days of launching, and without offering Realtors compensation.
Condos make up 87% of all new homes for sale in the GTA, according to buzzbuzzhomes