The Greater Toronto Area’s new home market sees sales reach new record lows with prices continuing to fall, according to recent data from Altus Group and the Building Industry and Land Development Association (BILD GTA).

In May, new home sales plummeted by 71% compared to the same month last year, with only 936 units sold. This decline has pushed year-to-date sales to 4,686 units, a 46% decrease from the previous year and the lowest level on record. The slump affects both single-family homes and condominiums, with sales dropping 65% and 75% respectively.

With the sales decline, inventory levels have risen to a multi-year high. As of May, there were 20,427 new homes available, marking a 33% increase from the previous year and the highest May inventory since 2016.

Prices for new homes have also softened, though they remain high by historical standards. The benchmark price for a single-family home fell to $1.61 million, a 7% decrease from last year, while condo prices dropped 5% to $1.04 million. Both segments have seen nearly 30% price reductions since their peak a few years ago.

Justin Sherwood, an executive at BILD, warns that the current sales slump could lead to project delays and reduced housing supply in the coming years, potentially exacerbating affordability issues in the long term.

The market’s weakness persists despite recent population growth in the region, suggesting that high prices and increased borrowing costs may have pushed many potential buyers to their financial limits. This aligns with rising apartment vacancy rates, which are now higher than pre-pandemic levels.

Information for this story was found via Better Dwelling, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.