New construction home sales in the Toronto region have hit the lowest level for May since 2000, down 81 per cent year over year, according to the home-building industry association.
It’s not clear how long the disruption will continue, said David Wilkes, CEO of the Building Industry and Land Development Association (BILD).
It took more than four months for the industry to bounce back from the 2003 SARS crisis, and that didn’t have nearly the impact that COVID-19 has exacted, he said.
The 866 newly built and pre-construction homes sold last month included 438 single-family dwellings — town houses, semi-detached and detached houses — 55 per cent fewer than May 2019. The 428 condos that were sold represented an 88 per cent year over year drop.
Single-family house prices remained flat at $1.11 million. But condo prices continued climbing 26.4 per cent annually to $984,436 on average.
The sales were not surprising, “given that these are reflecting activity in May when we were certainly in a period of people being encouraged to stay at home,” said Wilkes.
“Sales centres weren’t available for people to visit and look at new product,” he said.
May’s single-family home and condo sales were 68 per cent and 80 per cent below the 10-year average respectively, according to industry figures provided by Altus Group. It said last month’s sales were the lowest since it began tracking the industry in 2000.
There are anecdotal signs that buyers are active again, but it will be another month before there are numbers showing how many consumers have returned to the market, said Wilkes.
Wilkes said the shortage of homes in the GTA going into the COVID-19 crisis will be exacerbated as the industry comes back up to speed, although that will be offset to some extent by delays in immigration and other newcomers arriving in the region.
“I think we are looking at a period of time from a construction point of view for a return to normal of at least six to nine months,” he said.
A recent survey of its members showed the majority of housing projects in the GTA are more than six months behind schedule as a result of supply shortages, COVID-19 safety measures on work sites and approval delays.