Condominiums are buoying the GTA’s new-home market, with prices ahead by 25 per cent, year over year in May, to $758,370 despite a drop in sales, says the association that represents homebuilders.

The price of new single-family homes, meanwhile, continued to slide amid higher interest rates and government measures aimed at cooling what had been a frenzied and overheated market. The price of single-family homes in the GTA was down 6.4 per cent in May over the same period in 2017 to $1,144,191 and dropped by just less than 1 per cent from the previous month.

May GTA sales of single family homes were down 33 per cent from May 2017 while year to date transactions are off 68 per cent over the previous year. Condo sales were also down year over year and year to date, by 47 per cent and 57 per cent, respectively.

The Building Industry and Land Development Association (BILD) in a release said buyers of new homes looking for more affordable options are driving condo prices higher, with the continuing increase also reflecting a dip in existing inventory and a jump in average unit size to 892 square feet from 814 square feet a year ago. That in turn reflects demand for family-sized units and an increase in the average price per square foot to $850 from $743 last year, BILD says.

As for new single-family homes, “it is doubtful prices will continue to moderate, considering embedded government fees, taxes and charges and high land costs due to regulatory constraints,” said David Wilkes, BILD president and CEO.

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“Leading up to the October 22 (Ontario) municipal elections ... we will be putting forward a four-point plan on how municipalities can help tackle the issues of housing supply and affordability in the GTA,” he said. The plan would aim to put more houses on the market by streamlining the new project approval process.

The Canada Mortgage and Housing Corp. in a recent report said Ontario’s housing market will see “moderate” price increases in the 2018 to 2019 period in line with the rate of inflation thanks to economic growth, the lack of ownership affordability and a better balance between supply and demand.

That means the GTA is less prone to bidding wars, but homeowners may see their properties sit on the market for longer than usual, the CMHC says, suggesting that overvaluation has eased in the Toronto area.

“Home prices are plateauing and are expected to grow along a more sustainable linear path supported by continued economy growth, moderate increases in interest rates and only modest increases in new housing supply, ” said CMHC Ontario region economist Ted Tsiakopoulos.