One of the hottest residential real estate markets in Canada cooled off considerably in April, a much needed respite that could allow supply levels to gain ground, recently released data from the Building and Land Development Association showed.
April witnessed 1,727 newly built home purchases in the Greater Toronto Area, BILD reported. That's the lowest number of April new-home sales for the GTA in more than 20 years.
At a more granular level, single-family home transactions also fell, dropping 65 percent on a year-over-year basis and 70 percent lower than what's been typical over the last decade, the BILD reported.
Condominium purchases slid rather sharply, as well. BILD noted that among condo apartments in low-, medium- and high-rise buildings - not to mention stacked townhouses and loft units - 1,225 sold, which was 65 percent below last April's total and 38 percent lower than the 10-year average in the GTA.
Patricia Arsenault, executive vice president of research consulting services for new-home market intelligence firm Altus Group, noted that the reduced amount of purchase activity among GTA residents can't be chalked up to a solitary factor.
"While home-buying intentions remain strong, a combination of challenges is keeping many interested buyers out of the new-home market this spring," Arsenault explained. "First-time buyers need to save longer to qualify for a mortgage, and potential move-up buyers are faced with a bigger gap than a year ago between the price of a newly-built home and the price they can get for their existing home."
The pace at which would-be buyers have been buying has led to substantial price increases throughout much of the country, as builders haven't been able to keep up. However, home values are starting to come down, with the national average now at $495,000, according to the most recent statistics available from the Canada Real Estate Association. That's down 11.3 percent from April 2016.
Real estate experts believe more budget-minded buyers should be able to get off the sidelines and enter the market if the reduced price trend continues.