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New home sales in the Greater Toronto area continued at a torrid pace through March, completing a first quarter of exceptional marâ€" ket growth, Peter Langer, the president of the Greater Toronto Homebuilders‘ Association (GTHBA), announced today. "During the past two years, the numâ€" ber of existing homes offered for sale on the market has fallen by 25%," noted Willard Dunning, senior market analyst at CMHC‘s Toronto Branch. "The increased activity that resulted from lower interest rates in 1993 has caused shortages in a number of areas. Builders have taken the opportunity to attract more firstâ€"time buyâ€" ers by offering more affordable options, including smaller singles and townhomes. Housing starts were boosted by assisted housing in the past three years, but increased home buying will fuel housing construction in 1994." fter a disappointing 1993, housâ€" ing starts are éxpected to rise in 1994, according to Canada Mortgage and _ Housing Corporation‘s (CMHC) Spring Builders Forecast. Increased new home sales are expected to be the motivating factor in the improved construction activity. A tighter supply of modestly priced homes in the resale market is causing shortages in some areas, and providing greater opportunities for builders. Falling interest rates in late 1993 pushed new home sales up by 12% from 1992. The momentum in sales is continuing into 1994. The limited supply of existing starter homes is leading firstâ€"time buyers to the new home market, where they are finding an increasing variety of affordable housing options. For the year, new home sales are forecast to increase by 15% to 13,000 units. The dominance of firstâ€"time buyers will lower the average price of an absorbed singleâ€"detached home to $302,000. The most significant increase in starts will occur for multiple home ownership units, including semiâ€"detached, townâ€" Great spring potential for builders, CMHC says New home sales totalled 2,293 in March, an increase of 39% over February, and a stunning 127% increase over last March. So far this year, new home sales are up 87% compared with the first three months of 1993. We have only exceeded 2,000 unit sales once in the last five years (in March, 1991) so this is exceptional news," Langer stated. "‘The more than 5,000 homes we‘ve old so far this year translates into more than 12,500 jobs and that‘s great news for the homebuilding trades and suppliers," he said. Langer expressed confidence that the recent increases in mortgage rates would not cause a dramatic setback in the market. "Consumers recognize that affordability is still historically high and that the combination of relatively low interest rates and prices repreâ€" sent excellent value. The resale housing marâ€" ket, which tends to drive new housing, has also maintained its strength through April," he said. Housing Data Report (HDR), prepared by PMA Group (Brethour Research) for the GTHBA, stated that March new home sales consisted of 1,711 freehold homes (75%) and 582 condominiums (25%). The Greater Toronto Homebuilders‘ Association was established in 1921 â€" and has more than 730 member companies representâ€" ing Builders, Developers, Renovators, Service, Financial, Professionals, Subâ€"Contractors, Suppliers and Manufacturers and is the largest affiliate of the Ontario and Canadian Homebuilders® Associations. homes, and condominiums, which are forecast to rise to 4,400 units. Singleâ€" detached starts are also forecast to increase, up by 12% to 9,000. Continuing weak rental demand, however, will result in a reduction in rental construction. With declines expected in both the private and assisted market, rental starts are forecast to fall to 3,900. In total, housing starts will increase by 11% to 17,300 units in 1994. Countrywide 338â€"6550 rvice Road Wes TOWN CENTRE REALTY INC. s ; The fall in interest rates which occurred Stunning Executive Home, prof. fin. basement, Backs on Greenbeltt.Caill Gaill Fully upgraded. Queit exclusive location. Original Builders Model. Approx. 3000 This 2â€"storey home has 4 bdrms., open In one of Oabville‘s highest demand concept liv./din./kit. areas. Wonderfully developments. 3 bdrms., fam. mm. fin igned priced to sell. basement. The only one available. Immaculate River Oaks Townhome, 5 appliances, A/C. Move Right In. Truly one of a kind $149,900 $549,900 in 1993 made home ownership accessible to those with incomes over $40,000," added Dunning. "This makes home ownerâ€" ship affordable for at least 100,000 renters. As a result, affordability is generating strong demand, especially in the spring of 1994 when interest rates have bottomed. Strong firstâ€"time demand will continue for some time, but the rate of buying will gradually slow as the pool of buyers is depleted." The high level of affordability, Looking for a Luxury Townhome? Let me tell you what | have! 3 fin. levels, 4 batths, stunning decor, 6 appliances, backs on park. Call Gaill. upgraded sq. ft. A GEM! $269,900 $159,000 which has benefited the home ownership market, continues to weaken demand for rentals. High unemployment is limiting household formation, so tenants shifting to home ownership are not being replaced as quickly. Demand will be greater than the new supply, however, as rental construcâ€" tion dropped sharply in 1993. For 1994, the vacancy rate is forecast to fall to 1.8% in October 1994 from 2.0% in‘ October 1993. 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