Apr 16 | Posted by Barry Cohen

The hot housing market in the GTA is shattering records as the intense competition for single-family homes pushed the average price of a detached property over the $1 million mark in February. In stark contrast, the condo market has remained flat. In fact, the price gap between the price of a new house and a new highrise condo skyrocketed to nearly $300,000 last month.

February figures indicate that the average price of a new house which includes all low-rise housing, detached, semi-detached and townhouses in the Greater Toronto area was $733,578 in February a rise of 12 percent from February 2014. In comparison, new condo prices have actually fallen slightly in the past two months, with an average selling price of $442,672 showing a minimal increase of only 1 percent over the past year. When you look at the data from the resale market the result is similar with the price gap at nearly $250,000 in the first two weeks of March. Resale housing prices jumped 11 percent compared to a year ago, while condo prices remained relatively unchanged.

Last year the GTA was buzzing with new condo construction and we saw a flood of roughly 18,000 newly built condos enter the market compared with only 1200 new homes. Most of the condo construction was aimed at investors who are constantly putting pressure on developers to keep condo prices low and as a result builders have decreased the size of new units. A decade ago, the average size of a newly built condo was 925 square feet, recently built condos now average about 801 square feet in the region.

When the Toronto Real Estate Board released February sales figures single-family home sales were up by 17 percent from a year ago while condo sales were up by only 8.6 percent.  Condo sales actually dropped by 6 percent within the city limits, but rose slightly in the suburbs.

The trend towards single-family homes and away from highrise condos in the GTA is a national phenomenon.  According to figures from Statistics Canada investment in new highrise condo development jumped 6.4 percent across the country in January compared to a year earlier, at the same time investment in construction of new single-family homes rose by only 2.3 percent. Alberta is responsible for much of that growth, despite the drop in oil prices spending on new condo construction rose 14 percent year over year.  British Columbia and Ontario had the most to gain from cheaper oil prices and both saw spending on new home construction rise in January, 11 percent in B.C. and 3.6 percent in Ontario.

These figures reflect the shifting preferences of buyers in the GTA and the lack of buildable land in the region. Home shoppers seem to be increasingly willing to bid over asking price for the dwindling supply of single-family homes, and the glut of condominiums has given investors an abundance of choice.