Toronto’s new home market faced a significant downturn in July, with sales reaching an all-time low. According to data from the Building Industry and Land Development Association (BILD), only 1,034 new homes were sold across the Greater Toronto Area (GTA) last month. This represents a sharp decline of 64% compared to the ten-year average for July, highlighting the ongoing struggles in the housing sector.
The drop in new home sales is largely attributed to high borrowing costs, which have made homeownership less affordable for many potential buyers. The increase in interest rates has discouraged people from taking out mortgages, leading to a slowdown in the market. Additionally, rising construction costs have also played a role, as developers face higher expenses, which are passed on to buyers through increased home prices.
Despite the bleak numbers, industry experts believe that the market could stabilize if borrowing costs decrease in the future. However, until that happens, the market is expected to remain sluggish. BILD President and CEO Dave Wilkes emphasized the need for government policies that encourage housing affordability, suggesting that addressing the root causes of the affordability crisis could help revive the market.
As the market continues to grapple with these challenges, potential homebuyers are advised to remain cautious and informed about the current conditions. The significant drop in sales reflects broader issues within the real estate market that could have long-term impacts on the region’s housing availability and affordability.
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