October 22 - New lending restrictions impact home sales

October 22, 2012

New lending restrictions impact home sales

GREATER TORONTO, Oct. 22, 2012 - Sales of new homes and condominiums remained low in September - a result of new lending restrictions introduced in the summer, the Building Industry and Land Development Association (BILD) reported today.

"Changes to mortgage rules by the federal government and a tightening of lending for GTA projects by the banks have diminished consumer confidence and, ultimately, new home sales across the GTA," explained BILD President and CEO Bryan Tuckey. "It is important to recognize that the industry launched fewer new projects over the summer, which resulted in fewer home sales in September.

According to RealNet Canada Inc., BILD's official source of new home market intelligence, a total of 2,070 new homes were sold across the GTA, marking the second-lowest total for September in 13 years.

Year-to-date sales of 26,392 homes as of the end of September remained nearly identical to 2010 and down 23 per cent from the record-breaking 2011. High-rise sales remain third-highest on record at 19 per cent above the long-term average. Meanwhile, sales of low-rise homes add up to the second-worst ever recorded, resulting from high prices, a lack of product choice in ground-related housing and constrained land supply.

The RealNet New Home Price Index for a low-rise home rose 15 per cent to $623,245 declined 1 per cent in the high-rise sector to $439,265.

A statistical backgrounder can be found here. Contact Andrei Zaretski at azaretski@bildgta.ca or Amy Lazar at alazar@bildgta.ca for more information.

Sept '12

Low Rise

High Rise

Total

Region

2010

2011

2012

2010

2011

2012

2010

2011

2012

Durham

177

244

129

6

4

9

183

248

138

Halton

286

185

58

56

53

14

342

238

72

Peel

211

247

459

197

156

63

408

403

522

Toronto

29

44

18

1,253

1,902

536

1,282

1,946

554

York

379

500

419

233

599

365

612

1,099

784

GTA

1,082

1,220

1,083

1,745

2,714

987

2,827

3,934

2,070

Jan-Sept

12,294

13,582

11,823

14,092

20,766

14,569

26,386

34,348

26,392

Source: RealNet Canada Inc.

With more than 1,375 members, BILD, formed through the merger of the Greater Toronto Home Builders' Association and Urban Development Institute/Ontario, is the voice of the land development, home building and professional renovation industry in the Greater Toronto Area.  BILD is proudly affiliated with the Ontario and Canadian Home Builders' Associations.

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