Tag Archives: Michael Collins

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The July 2019 GTA housing market

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The July 2019 GTA housing market

With 8,595 sales reported through TREB’s MLS System in July 2019, up 24.3 per cent on a year over year basis, it’s clear that demand for ownership housing has certainly strengthened and that more buyers are coming online after coming to terms with the OSFI mortgage stress test over the course of the last year-and-a-half.

Yet, with new listings growth lagging far behind sales at just a 3.7 per cent when compared to this time last year, it’s clear that market conditions are tightening and we’re beginning to see a case of growing pent-up demand with more competition between buyers in many neighbourhoods.

Increased competition between buyers has resulted in stronger price growth for many home types. In July, the average selling price increased by 3.2 per cent to $806,755 compared to July 2018.

Building more housing key to addressing affordability issues

The disparity between demand and supply is creating pent-up demand for ownership housing increase as well. This is largely the result of GTA residents continuing to see homeownership as both a goal and a sound long-term investment on the one hand, and need for GTA housing supply sitting at 40,000 to 50,000 each year due to strong population growth on the other hand.

As more buyers come back to the market in the coming months and years, we could end up with a marketplace that is chronically undersupplied and price growth reaching unsustainable levels. It is encouraging that both the City of Toronto and the provincial government are working on ways to address our housing supply issue and meet pent-up demand head-on.

For instance, a recent motion by Mayor John Tory has given City staff a strong mandate to report back on how to develop a greater diversity of housing options in traditional single-family neighbourhoods, including timelines. Similarly, the provincial government has launched consultations to spur on and speed up the development of different forms of housing in conjunction with its More Homes, More Choice Plan.

A focus on different forms of housing is key; we’re seeing price growth become increasingly driven by higher density lowrise home types, yet these are not the types of houses that have been commonly constructed over the past two decades.

With consumer preferences changing, in part due to the impact of the mortgage stress test, we need to see the development of a greater diversity of mid-density housing. With the recent announcements from the City of Toronto and Province of Ontario in mind, it seems that government policy is heading in the right direction.

Michael Collins is president of the Toronto Real Estate Board, a professional association that represents 54,500 professional realtor members in the Greater Toronto Area. You can contact him at trebpres@trebnet.com. For updates on the real estate market, visit trebhome.com.

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Behind the numbers : The GTA housing market in June 2019

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Behind the numbers : The GTA housing market in June 2019

The story of the June market is one of increased demand and constrained supply. With sales up 10.4 per cent on a year-over-year basis to 8,860 and new listings down by 0.4 per cent to 15,816, it’s clear that market conditions have tightened.

With sales accounting for a greater share of listings, competition between buyers has arguably increased in many parts of the GTA. Not surprisingly, increased competition between buyers has underpinned moderate year-over-year increases in home prices. The average selling price for June was up by three per cent over June 2018 to $832,703. Through the first half of 2019, price growth has been driven by sales of higher-density dwellings such as semi-detached houses, townhomes and condos. This makes sense given that these are typically less expensive home types that are becoming more desirable options for buyers under the new Office of Superintendent of Financial Services (OSFI) mortgage stress test regime.

Given that we expect continued growth in the GTA population over the long-term, we should also expect the demand for ownership and rental housing to increase as well. The question becomes how do we ensure there is adequate housing supply to meet demand, keeping the market balanced with a sustainable pace of price growth over time?

Part of the answer seems to lie in building more mid-density housing to provide GTA buyers with more affordable housing options. There needs to be more of this type of housing to bridge the gap between condominium apartments and detached houses. We are encouraged by the recent vote by Toronto City Council to move forward on tackling missing middle housing, and the consultation launched by the Province on building different types of housing that people need and can afford.

Finding ways to add more semi-detached, townhomes and plexes, for example, to existing neighbourhoods and creating new developments with a full continuum of housing options, must be a key component of municipal, provincial and federal housing plans and policies moving forward.

As we move toward a federal election this fall, it will also be crucial for those vying for public office to make clear their thoughts on housing policy, including policies associated with mortgage lending such as the OSFI two percentage point mortgage stress test and allowable amortization periods on insured mortgages – two areas where some flexibility is arguably warranted.

Reconsidering these policies, with an eye toward flexibility, could help ensure that housing policy can adapt to different stages of the economic cycle and avoid volatility brought on by short-term market distortions.

Michael Collins is president of the Toronto Real Estate Board, a professional association that represents 54,500 professional realtor members in the Greater Toronto Area. You can contact him at trebpres@trebnet.com. For updates on the real estate market, visit trebhome.com.

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