Uncertain future for GTA home construction after strong start to year
The home-building industry, like most, is facing the economic uncertainties of COVID-19 but it is coming into the crisis following a particularly strong start to the year in the GTA.
New-build, single-family home sales in Greater Toronto rose to the highest levels since 2004 in February — up 228 per cent year over year, as prices declined 2.2 per cent to a benchmark of about $1.09 million.
The 2,247 homes — detached, semi-detached and townhomes — sold by builders last month represented a 44 per cent increase over the 10-year average, according to the Building Industry and Land Development Association (BILD).
Condo prices continued to climb 21.3 per cent in February to $961,268 with the number of sales 197 per cent above February 2019 and 48 per cent above the decade average.
BILD CEO David Wilkes said on Wednesday that builders now face an “an uncertain time.
“As an industry, we are focused on bringing to completion many of the projects that are underway to ensure that those that were promised those units, that they are delivered,” he said.
He said builders are addressing the health and safety requirements and public-health direction of authorities working to slow the spread of COVID-19.
There had been reports last week that some construction workers were facing unsafe conditions in terms of distance from other people and sanitation at work sites.
The construction industry has been deemed an essential service by the province, but Premier Doug Ford said workers must be assured the safest possible conditions while continuing to bring projects to completion.
Work is proceeding at a slower pace to allow for new health and safety protocols, said Wilkes. Builders are limiting sites to single crews, focusing on exterior work and using skeleton crews to facilitate distancing among workers.
Wilkes said he finds it “reassuring” that the interest in buying new homes hasn’t entirely disappeared, although it has slowed considerably.
“We are still seeing people buying, certainly not to the levels we saw (in January and February) but there are a number of discussions going on digitally, through Skype, with potential purchasers,” he said.
Wilkes praised municipal governments across the Greater Toronto Region for working to make sure that building inspections and permits are letting work continue.
“But approvals for new projects have been slowed down even more,” he said.
Prior to the pandemic measures, the sales in new homes was being driven by low mortgage rates and pent-up demand, said Patricia Arsenault, executive vice-president of Altus Group, the company that tracks the home construction industry.
There were 17,199 homes, about five months of inventory at the rate of sales over the past year, available for sale at the end of February, according to Altus. That includes homes in the pre-construction and construction phase, as well as completed buildings. That inventory remains below the longer-term average of eight months’ inventory.Tess Kalinowski is a Toronto-based reporter covering real estate. Follow her on Twitter: @tesskalinowski