The dream of a new detached house with a yard just passed the million-dollar mark in the Toronto area widening the gap between a starter condo and a place with a little more space.

As of March 31, the average price for a new detached home in the GTA was $1.05 million - more than double what it cost a decade ago and 21 per cent higher than the end of last March, according to a report by Altus Group for the Building Industry and Land Development Association (BILD) released Thursday.

The Toronto region has crossed a key psychological threshold, said BILD CEO Bryan Tuckey

"It's really, really important because in people's minds $1 million is a lot of money for a home," he said.

Tuckey puts the existing price situation down to simple supply and demand.

"If we continue with this supply not keeping up with demand prices will increase. It's that simple," he said.

There is an influx of 36,000 new households into the GTA annually while the supply of new ground-level homes, including detached houses, town homes and semis, is at a record low, 3,036 - down from nearly 15,000 10 years ago.

"Thirty-six thousand homes is a lot of homes. It's a big challenge," said Tuckey.

As the supply of detached homes, towns and semis declines, high rise supply has remained fairly steady with 18,280 condos available, including pre-construction projects, those under construction and 1,736 built units.

Around 2008, the difference in price between the average high rise condo and the detached or attached ground level home was less than $100,000. Today it is close to $400,000.

"The challenge becomes quite extreme for new home purchasers. Even if they are able to sell a condo if they have one for $400,000, they still have to come up with a mortgage of $400,000-plus just to bridge that gap," said Tuckey.

Part of the high price phenomenon is a result of taxes. An earlier Altus study found 20 per cent of the price of new homes is attributable to government fees such as development charges and land transfer.

"Development charges in the GTA since 2004 have increased between 143- and 257 per cent and that is generally passed on to the consumer," said Tuckey.

"When you have taxes in the 20- to 23-per cent range, municipalities have to begin to make different choices," he said.

Tuckey said the building industry has transitioned its business to respond to the province's densification plan, Places to Grow. But the government needs to do a better job of explaining what that means to residents.

"It's not a boom. It's an incredible shift from low-rise homes to high-rise homes," he said.

But Tim Gray of Environmental Defence said builders and developers have traditionally resisted those sprawl-prohibiting policies.

There's more than enough land to build sub-divisions until at least 2031, he said.

"If you look at places like Vaughan or suburb cities north of the city, they have a large amount of land within their urban boundaries approved for low-density development," he said.

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Prices are climbing in urban areas because people want to live there, said Gray.

"They don't want to drive because it's hellish. That is what's driving high home prices in downtown Toronto," he said, adding there's mounting evidence that Ontario needs more policies like the development-protected Green Belt around Toronto.

New home numbers

$861,848 Average price of a new detached house in the GTA in March 2015

$439,294 Average price of a new detached house in the GTA in March 2006

$849,312 Average price of townhouse, semi- and detached home in the GTA in March

$459,231 Average price of a new GTA condo in march

$300,000 Average price of a new condo in 2006

3,592 GTA new home sales in March

3,757 GTA new home sales in March last year

3,382 10-year average of GTA new home sales in March

Altus Group for BILD