GTA home sales slump in July as home buyers become vary of interest rate hikes, report shows

Housing market in the Greater Toronto Area hit another low as new home sales slumped 18 per cent in July 2023 compared to the year before, and was 50 per cent below the 10-year average, the Building Industry and Land Development Association (BILD) said Wednesday.

The association cited rising interest rates as the point of caution for potential home buyers, as a shortage of supply continues to negatively impact affordability across the market.

“GTA new home sales slumped in July,” the release said, adding that the latest interest rate hikes have “pushed many buyers to the sidelines again as affordability continues to deteriorate.”

While there were 1,190 new home sales in July, apartments accounted for just about 828 units – down 39 per cent from July 2022 and 50 per cent below the 10-year average.

BILD said that condominium apartment sales in the GTA in July was the lowest it has been in the last 23 years.

Single-family home sales in July rebounded from last year, and were up a massive 281 per cent, but were still 51 per cent below the 10-year average, BILD said.

According to the release, despite chronic supply shortages, new home inventory did grow slightly last month compared to June of this year, with 16,683 units available across the GTA. Slowing sales and rising inventory have also softened benchmark prices – the typical home purchase prices in a given market.

“The benchmark price for new condominium apartments was $1,084,768, which was down 9 per cent over the last 12 months. The benchmark price for new single-family homes was $1,673,696, which was down 13.5 per cent over the last 12 months.”

BILD’s CEO and president, Dave Wilkes, said the federal government needs to do more to help uplift the slumping market. He said that deferring Harmonised Sales Tax on rentals and helping municipalities financially to deliver housing infrastructure was within the government’s scop to help the housing market.

“We call on the federal government to act with the urgency the situation demands,” Wilkes said in the press release.

Rahat Sandhu