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BILD Outlook 2020

Outlook 2020 – what’s in store for GTA housing next year?

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Outlook 2020 – what’s in store for GTA housing next year?

Global and even some Canadian economic and political uncertainty shouldn’t derail growth in the GTA housing market next year, according to experts at the Building Industry and Land Development Association’s (BILD) recent Outlook 2020 event.

Craig Wright, senior vice-president and chief economist at RBC, and Peter Donolo, political and communications strategist with Hill + Knowlton Canada, said that overall, the fundamentals for the economy and housing market in Ontario and the GTA bode well for 2020. There are some challenges, however – namely the ongoing new home supply issue.

With Justin Trudeau’s Liberals re-elected as a minority government, Canada will see a relatively stable left-leaning federal government that will focus on environmental issues, affordability and redistribution rather than on economic growth, Donolo says.

BILD Outlook 2020
Left to right, Dave Wilkes, Peter Donolo and Craig Wright

Globally, geopolitical uncertainty and softening economic growth mean that Canada faces challenges with export and investment, leaving the heavy lifting to the consumer, according to Wright. Economic growth is expected to be modest and in line with employment and income, at about 1.7 per cent, and interest rates will likely continue to be low.

Strong employment growth

For Ontario, GDP growth will likely be a notch below, about 1.5 per cent, with housing starts for 2019 and 2020 at about 72,000 units, compared to about 79,000 in 2018, Wright says.

“That reflects a number of factors,” Wright told HOMES Publishing. “We continue to see strong employment gains, Ontario is leading Canada in terms of employment growth on a year-over-year basis, and strong population growth. So, strong fundamentals supporting it, in a low rate environment.”

BILD Outlook 2020 Craig Wright
Craig Wright, senior vice-president and chief economist, RBC

The GTA’s robust population growth will continue to drive demand for both ownership and rental housing, Wright says. Municipal and provincial governments are shifting to supply-side solutions for balancing the housing market.

“As you look at the structural reality of the GTA market, where we have immigration coming in… we have 140,000 to 150,000 people coming to this region each and every year,” adds BILD President Dave Wilkes. “That really does bode well for our industry.”

The mortgage stress test needs to be revisited in light of the continued low interest rates, Wright says.

Millennial attitudes

Another issue that might affect the Canada and the building industry is Millennials and their views on the environment and the economy – attitudes Donolo describes as “absolute.”

BILD Outlook 2020 Peter Donolo
Peter Donolo, political and communications strategist, Hill + Knowlton Canada

“When I say absolute, you talk about the oil sands and it’s like you’re talking about the Medellin drug cartel,” he says. “They’re not conscious or interested in the fact that the oil sands and Canada’s oil and gas sector is a kind of the backbone of the Canadian economy, that millions of jobs depend on it… They’re not interested in a kind of slow transition or weaning away from it. They think it’s immoral… and this is a very widespread view.”

Millennial views on homeownership are also different, Donolo says.

“Do Millennials look differently at what homeownership is about? Are they less interested in owning a traditional detached house with a backyard and property? If you look at rates of drivers licenses among Millennials, there is perhaps an indication.”

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CL June 19 News BILD

GTA new home market shows encouraging signs in March

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GTA new home market shows encouraging signs in March

CL June 19 News BILD

The GTA new home market continued to show some encouraging signs in March, according to the Building Industry and Land Development Association (BILD).

Total new home sales, with 2,314 new homes sold, were up 20 per cent from last year, though still 36 per cent below the 10-year average, according to Altus Group, BILD’s official source for new home market intelligence. There were 886 new single-family homes sold in March, including detached, linked and semi-detached houses and townhouses, up from last March’s low of 295, but still 38 per cent below the 10-year average. This is the fifth month in a row that new single-family home sales have increased year-over-year.Sales of new condominium units in low-, medium- and highrise buildings, stacked townhouses and loft units, with 1,428 units sold, were down 13 per cent from March 2018 and 34 per cent below the 10-year average.

Broader availability

“The desire to own a new single-family home never went away, but many would-be buyers have been taking a wait-and-see approach in the past two years,” says Patricia Arsenault, Altus Group’s executive vice-president, Data Solutions. “While the affordability of single-family homes in general remains a challenge, the broader range of product at more favourable price points that is starting to emerge has attracted some of these buyers into the market.”

The benchmark prices of both single-family homes and condominium apartments moderated slightly compared to the previous month. The benchmark price of new single-family homes was $1.12 million, down 7.6 per cent over the last 12 months, while the benchmark price of new condominium units was $780,839, up 5.1 per cent over the last 12 months.

Affordability still an issue

“Despite the recent slight moderation in new home prices, affordability is an issue for many people in the GTA, as we have learned from our Building Answers campaign, which encourages residents to ask questions about development,” says David Wilkes, BILD president and CEO. “Affordability will continue to be a challenge until structural remedies are introduced to fix the GTA’s housing supply shortage. It is clear that we all – industry, government and public – need to look for ways to build more housing faster and to mitigate unnecessary delays and costs on new housing.”

Remaining inventory in March included 11,744 condominium units and 5,054 single-family homes. Remaining inventory includes units in preconstruction projects, in projects currently under construction and in completed buildings.

 

March new home sales by municipality

Condominium units Single-family homes Total
Region 2019 2018 2017 2019 2018 2017 2019 2018 2017
Durham 35 14 188 173 66 209 208 80 397
Halton 70 64 110 107 59 296 177 123 406
Peel 84 99 197 307 126 366 391 225 563
Toronto 953 1,081 3,628 88 5 93 1,041 1,086 3,721
York 286 382 442 211 39 372 497 421 814
GTA 1,428 1,640 4,565 886 295 1,336 2,314 1,935 5,901

Source: Altus Group

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Home Realty: Housing Should Be An Election Issue

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Home Realty: Housing Should Be An Election Issue

Proactive buyers can improve housing market conditions by voting for change

For buyers in search of somewhere to call home, the GTA real estate market can seem like a daunting place. In January, sales of new single-family homes in the GTA — including detached, link, semi-detached and townhouses — hit the lowest level for that month in almost 20 years, representing just 365 units out of the 1,251 total new homes sold in the first month of 2018, according to Altus Group.

Demand for single-family homes remains strong, but the number of units available on the market has been severely limited, largely as a result of provincial government policies that have constricted the supply of land that new homes can be built on. This has caused prices to soar. In January, the benchmark price for available new single-family homes rose 20 per cent compared to the same month in 2017, to $1.2 million.

The situation has forced buyers to look to the condo market, with apartments in lowrise, midrise and highrise buildings, stacked townhouses and loft units accounting for 71 per cent of new home sales, with 886 units sold. But buyers turning to the condo market for pricing relief aren’t faring much better. The benchmark price for condos in the first month of the year was up 41 per cent over January 2017 — to $714,430 — according to Altus Group.

The GTA is expected to grow to nearly 10 million people by 2041, and our provincial government needs to do more to increase housing supply, whether it’s simplifying approval processes, updating zoning by-laws or servicing developable land to bring more homes to the market.

It’s not just provincial politicians who are responsible for the issues currently facing the GTA housing market, however. Municipal governments have added to housing affordability challenges, particularly in Toronto, where home purchasers are hit with a double land transfer tax. On top of this, development charges paid by builders to municipalities continue to rise, and these increased costs are passed down to those purchasing homes, further worsening affordability.

And the federal government’s recent introduction of more stringent mortgage stress test requirement will make it more difficult for first-time buyers, seniors and average GTA residents to qualify for the amount of mortgage that they could have previously afforded.

All of this is contributing to a housing market that is far from fair for all, a place where soon only those with gobs of money will be able to participate.

But members of the public can play an important role in shaping the future of the housing market by being proactive. That is, by voting for candidates who support efforts to increase housing supply, and by not supporting politicians who pander to NIMBYs in their ridings.

There’s no better time than now for the public to be proactive. A provincial election is coming up in June, followed by municipal elections in October, and the next federal election is slated for 2019. All of these represent excellent opportunities for residents and aspiring homebuyers to make a big difference in determining the future of our housing market. So get out there and vote — use your ballot to tell politicians that things must change.

Debbie Cosic, CEO and founder of In2ition Realty, has worked in all facets of the real estate industry for over 25 years. She has sold and overseen the sale of over $15 billion worth of real estate and, with Debbie at the helm, In2ition has become one of the fastest-growing and most innovative new home and condo sales companies. In2ition has received numerous awards from the Building Industry and Land Development Association and the National Association of Home Builders.

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Paul Golini Jr.

EnerQuality honours Hall of Fame recipient Paul Golini Jr.

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EnerQuality honours Hall of Fame recipient Paul Golini Jr.

EnerQuality is pleased to announce this year’s EnerQuality Hall of Fame award will be given to Paul Golini Jr., co-founder and executive vice president of Empire Communities, one of Canada’s largest real estate development companies. The recognition will be presented at the Housing Innovation Forum and Awards on February 23, 2017.

From sitting on boards and steering committees of industry regulatory bodies like Tarion and EnerQuality, to his leadership role as chairman of one of the industry’s most influential organizations, the Building Industry and Land Development Association (BILD), Golini’s vast array of experience has led to opportunities in leadership, research and consultation. Having built more than 10,000 new homes and condominiums with development and home building operations in Canada and the U.S., Golini is a leader, mentor and guiding force in the industry.

enerquality.ca

empirecommunities.com


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