Explode! Government fees soar 1200% in 15 years, causing 80% of Toronto's housing market investors to suffer losses

The Building Industry and Land Development Association (BILD), the representative organization of the new housing industry in the Greater Toronto Area (GTA), has once again released some disappointing market data, depicting the shrinking activity of this once attractive market for investors.

Astonishing data shows that 80% of investors who purchase newly built apartments are losing money, which is no wonder that the sales volume of newly built apartments last month decreased by 61% compared to August 2023, and decreased by 81% compared to the 10-year average sales volume.

If single family homes are also included in the calculation, these numbers have not improved, with a year-on-year decrease of 46%, an 81% decrease from the 10-year average, and a 70% decrease in July.

Now is the peak inventory period, which provides buyers with more choices and bargaining power - provided that sellers can find any interested buyers. Many sellers find it difficult to achieve this unless they are willing to bear significant losses.

BILD stated that the number of active listings in August has slightly decreased compared to July, but still reached 21296 units, of which 80% are apartments.

For developers, in addition to the sharp drop in sales, they also face high municipal development costs, soaring material and labor costs, and other difficulties, which have led many developers to suspend new projects. Fortunately, this does not seem to have affected the record high supply.

BILD wrote in this week's update: The inventory months remain high not because the number of newly listed units in the market has increased significantly, but because sales have continued to decrease. This is an unhealthy situation because when interest rates fall, sales will recover, but the recovery of new buildings will take longer, which will lead to future supply-demand imbalances.

BILD also pointed out that the new home sales data in August painted a grim picture of the housing market struggling with deep-seated structural problems, which have led to high construction costs. They believe that the crisis is real and will be reflected in fewer job opportunities, fewer new homes, and intensified affordability challenges in the coming years.

Developers and builders have repeatedly called on the government to reduce the soaring costs of new housing, which have risen by 1200% in some parts of Ontario over the past 15 years. The Coalition Against the New House Tax (CANT) has been established, which believes that cost cutting is necessary to help reduce the housing prices faced by consumers.

Source link: https://www.blogto.com/real-estate-toronto/2024/09/toronto-real-estate-plunge-sales-shocking-low/