New home sales in December plummeted to the lowest level in almost four decades in the Greater Toronto Area (GTA), according to a building industry group, capping off a “historic” year with the worst annual total sales since 1990.

Citing data from Altus Group, the Toronto-based Building Industry and Land Development Association (BILD) said there were 310 new home sales in December, a 46 per cent decline from December 2023 and 80 per cent below the 10-year average.

In 2024, GTA new home sales totalled 9,816, 47 per cent below 2023 and 69 per cent below the 10-year average.

The Altus monthly market report, which covers single-family and condo new home sales, found declines in both types of housing, particularly condos. Sales in December and 2024 as a whole fell 63 per cent for condos, compared to one and 12 per cent, respectively, for single-family homes.

The findings represent “the foundation of the next housing crisis being laid today,” warned Justin Sherwood, BILD’s senior vice-president of communications, research and stakeholder relations.

New home sales plunged in 2024

Compared to a 10-year average of 420 sales, single-family home sales in December numbered 160 — a 62 per cent decrease. For condos, 150 new sales were made that month against the 10-year average of 1,094 — an 86 per cent decline.

Year-to-year, the story was similar. New condo sales in 2024 overall numbered 4,720, about one-fifth of the 10-year average. Single-family sales last year totalled 5,096, just under half of the 10-year average.

The new home benchmark price for a single-family home was $1.6 million in 2024; a condo $1 million. Prices for both types of housing decreased slightly in December compared to a year prior: the price of a condo 2.8 per cent; a single-family home by 3.4 per cent.

Remaining inventory for new homes, representing the available new housing for buyers, was 21,787 units in 2024 — 16,967 condo units and 4,820 single-family properties.

The 2024 remaining inventory is a combined inventory level of 14 months based on average sales for the past 12 months, according to BILD. “Physical remaining inventory was basically stable across 2024 with very little inventory added given the challenging economic environment.”

Though the new home market floundered in 2024, the Toronto Regional Real Estate Board saw better news for home sales overall in the GTA. Annual sales in 2024 ended up at 67,610, a 2.6 per cent increase from 65,877 sales in 2023. New listings shot up 16.4 per cent year-over-year from 2023 to 2024 to 166,121.

A 'housing crisis' from a construction cost crisis

New home buyers showed signs of reluctance to enter the market despite the lower mortgage rates, falling prices and elevated inventories, Edward Jegg, research manager at Altus Group, said in the BILD release.

A “cost to build” challenge is hindering the construction of new builds, Sherwood said, due to “skyrocketing construction costs, soaring financing rates, and increasingly high municipal fees over the last five years” that have made it “financially impossible to build homes that the market can, and is willing to, absorb at present prices.”

Toronto construction costs continue to rise at twice the recommended average growth rate of three to four per cent, according to a Rider Levett Bucknall report in 2024.

RBC economists have blamed increased development fees, the rising cost of construction materials and a worker shortage, factors which will impede the building of more housing and impact long-term housing affordability.

Sherwood urged “immediate action from governments to reduce development charges and municipal fees,” or else the “future housing supply of the GTA is in peril.”

In a BILD report on November new home sales in the GTA, Sherwood offered the City of Vaughan’s decision to lower development charges as an example of one step in the right direction.