Last week, I had a chance to review new-home sales figures for the first half of the year. As expected, the trends we began to observe in August 2012 have rolled into the first half of 2013 — prices are hitting record highs while sales are down to record lows.

New-home sales in the first half of 2013 came up as the second-lowest in a decade and 34 per cent below the long-term average. The decline is largely seen as a result of reduced affordability, particularly in the low-rise sector, which sits 43 per cent below the long-term average as of June 30 — another record-low.

Meanwhile high-rise sales in the first half of 2013 were the second-lowest in 10 years, and 19 per cent below the long-term average.

As I’ve mentioned in earlier columns, the explanation behind this reduction in sales can be summarized with one word: affordability.

Constrained land supply, stricter mortgage lending rules and rising government fees and charges have all contributed to the diminished affordability and choice in the GTA’s new-homes market.

The GTA market has no shortage of demand, as evident by the 100,000 new residents who choose to move here every year, but supply is a bit more complex. Here in Ontario, we have provincial public policy that protects areas such as the Greenbelt, as well as policy directing where and how the GTA is intended to grow over the next 20 years.

Following the introduction of Places to Grow, which placed an emphasis on intensification across the province, land supply for ground-related housing in the GTA saw a sharp decline. This resulted in exponential growth in pricing of new, ground-related homes while restricting choice in housing type for new homebuyers.

In July 2012, the Bank of Canada’s new, stricter mortgage lending rules took effect in an effort to cool down the housing market.

Not only did these new rules, which reduced the maximum amortization rate from 30 to 25 years, make it more difficult for homebuyers to pay off their loans, it severely reduced consumer confidence in the GTA.

Sales of new homes dramatically declined in August following the implementation of the rules, taking many potential homebuyers out of the market.

Earlier this year, BILD commissioned a study to show how much government fees and charges influence the cost of a new home in the GTA. The report showed that, on average, one-fifth of that cost could be attributed to a variety of fees and charges collected by municipal, provincial and federal governments.

The most significant of these fees are development charges — funds collected by municipalities to pay for new, growth-related infrastructure, which are passed on to new homebuyers.

Since 2004, development charges have increased between 143 and 357 per cent across the GTA, with several municipalities suggesting additional increases, some as soon as later this year.

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BILD is always at the table, working with all levels of government to ensure that our industry can build safe, affordable, quality homes for new homebuyers across the GTA. It’s time to change the conversation about the new homes market and spread the word about the realities of this industry.