GTA's new home buyers now pay much more for their purchases
In a newly released study, Altus Group and the Building Industry and Land Development Association (BILD) reported that current government fees, taxes, and charges comprise a major portion of what new home buyers in the Greater Toronto Area pay for in their purchases.
The report noted that said costs add $186,000 to the price of an average new single-family home and $121,000 to the cost of an average high-rise apartment unit in the GTA.
“Some of these costs, such as development charges, are increasing far faster than the rate of inflation, squeezing prospective new home buyers out of the market,” BILD president and CEO Dave Wilkes said.
The joint report added that the weight of the combined fees has increased across the GTA between 236% and 878% since 2004, far above the inflation rate and the average wage increases during the same time frame.
“Combined, development charges and HST make up nearly 80% of all government fees applied to new homes. With affordability being a significant concern in GTA markets, these types of increases are not sustainable,” Wilkes added.
The report came on the heels of the latest numbers released by Altus Group and BILD, which showed that GTA’s new home market saw a relatively cool month in March amid a noticeable decline.
The metropolitan area saw a total of 1,960 total new home sales in March, including 1,649 condominium apartments sold in low, medium, and high-rise buildings, stacked townhouses, and loft units. This represented a dramatic 67% year-over-year decline, and 21% lower than the 10-year average.
March condo sales were below underlying demand levels, according to Altus Group executive vice-president (research consulting services) Patricia Arsenault.
“Some of the demand that might have normally occurred this year was brought forward last year, helping to set a record year for condo apartment sales in 2017,” Arsenault said. “After an adjustment period, we expect the monthly pace of condo apartment sales to improve.”
Meanwhile, new single-family home sales went down by 77% from March 2017 and 79% from the 10-year average.