The new-home market in Greater Toronto hasn't been this quiet since the 20th century, and the industry is placing the blame squarely on the mortgage stress test and rising interest rates.
But some in the business see another explanation: Prices have risen too high, and with price growth slowing, buyers no longer feel pressure to get into the market quickly.
There were 25,161 new home sales in the GTA in 2018, the lowest number in records going back to 2000, according to data released Friday by the Building Industry and Land Development (BILD) Association.
That statistic looks even worse when considering that Greater Toronto's population has grown more than 26 per cent in that time.
Earlier: Gobsmacking basement apartment is a sign Toronto rents are too damn high. Story continues below.
Sales of low-rise family homes — including detached, semi-detached and townhouses — dropped 50 per cent from the year before, BILD said, and are a full 74 per cent below their 10-year average. The benchmark price fell 6.7 per cent, to $1.144 million.
New condo sales in 2018 dropped 38 per cent from a record high the year before, but were more or less in line with the long-run average. Still, the benchmark reached $796,815 at the end of the year, up 11 per cent in a year and up a whopping 57 per cent over the past two years.
Buyers are now paying quite a premium for new condos; the average price for an existing condo in December was $552,423.
Earlier on HuffPost Canada:
"From our point of view, the market is out of balance," BILD President David Wilkes said in a statement. "We must continue to work with all levels of government to ensure that policies don't artificially price consumers out of the market."
The policies they're referring to are the Bank of Canada's interest rate hikes and the new federal mortgage stress test. BILD is one of a growing number of industry groups complaining loudly about the test that came into effect in January, 2017.
But at this point, there's more to the slowdown than that. Many experts say buyers simply can't afford prices at these levels. According to Royal Bank of Canada, condo affordability in the GTA is at its worst since around 1990, when the city was experiencing a historic housing bubble. For single-family homes, affordability is the worst ever in records going back to 1986.
No more FOMO
And the mood in the market seems to have shifted.
"Buyers aren't feeling the need to get in," realtor Cameron Forbes told the Globe and Mail recently. He described the market as being "slow" in January and predicted a tepid start to the usually hot spring homebuying season.
That's quite the change from a few years ago, when "fear of missing out" drove double-digit price growth.
All the same, BILD — like many others in the industry — have called on policymakers to loosen the restrictions surrounding homebuying.
They called on the government to "revisit the stress test and allow a longer amortization period for first-time buyers. And we look forward to working with our municipal partners on removing barriers to development such as excessive red tape and outdated bylaws."