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2019 web

Forecast 2019 – where are Canada’s hottest housing markets?

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Forecast 2019 – where are Canada’s hottest housing markets?

2019 web

Wondering where Canada’s hottest housing markets are, as 2018 comes to a close and 2019 is just around the corner? Well, that all depends on who you ask.

Two of Canada’s large realty firms – Royal LePage and ReMax – both issued their 2019 housing market outlooks on Dec. 11.

Yes, the very same day.

Rather than produce two stories on the exact same topic, just from different sources, we thought it would be interesting to compare them. And while there are some commonalities in their forecasts, there are also some interesting discrepancies.

There is no ‘Canadian’ market

Let’s begin with the headline of ReMax’s 2019 Housing Market Outlook: “Canadian home prices expected to increase by 1.7 per cent in 2019.”

Yeah, about that. Forget that headline. As we recently wrote, those national numbers are pretty meaningless. It’s like trying to summarize the weather, temperature or traffic as “Canadian.”

But, just for comparison purposes, ReMax estimates Canadian home prices will grow 1.7 per cent in 2019; Royal LePage, 1.2 per cent.

National numbers that do matter are interest rates, GDP growth and employment. Then there’s immigration, which affects some markets more than others, mortgage regulations and housing supply. All of these factors are the key drivers of real estate. But more on that later.

Now let’s take a look at some of the regional highlights.

GTA

ReMax says:

  • Toronto average prices down 4% in 2018 to $789,181
  • Toronto average prices forecast to rise 2% in 2019 to $804,964

In Toronto, rising interest rates and the mortgage stress test were the two major factors affecting market activity in 2018, with average sale prices dropping by four per cent from $822,572 in 2017 to $789,181 in 2018, and unit sales down by 16 per cent. Lack of affordability in the single-detached segment will make it difficult for buyers wanting to enter this market. Resale condos, on the other hand, now represent almost 37 per cent of total sales, fueled by affordability.

ReMax Housing Market Outlook, select major markets

Region 2018

 Average Home Price

 

2019

Average Home Price

(Forecast)

Year-over-Year

(%)

Vancouver $1.05M $1.01M -3.0%
Edmonton $379,539 $360,562 -5.0%
Calgary $487,399 $487,399 0.0%
Saskatoon $333,187 $343,182 0.6%
Regina $322,500 $322,500 0.0%
Winnipeg $323,001 $335,921 4.0%
Windsor $299,750 $329,725 10.0%
London $379,654 $398,636 5.0%
Kitchener-Waterloo $473,275 $487,473 3.0%
Hamilton-Burlington $707,949 $849,538 2.0%
Barrie $477,839 $492,174 3.0%
Oakville $1.08M $1.13M 5.0%
Mississauga $705,406 $733,622 4.0%
Brampton $577,846 $600,959 4.0%
Durham $594,585 $612,422 3.0%
Toronto $789,181 $804,964 2.0%
Ottawa $678,670 $705,816 4.0%
Halifax $299,982 $308,981 3.0%
St. John’s $265,523 $265,523 0.0%

 

Elsewhere in Ontario

Rising interest rates and the stress test continue to make it difficult for prospective buyers in Barrie, Oakville and Durham regions.

“This is particularly true for first-time buyers and single Millennials, as evident in cities like Brampton, Kingston and Durham,” says Christopher Alexander, executive vice-president and regional director, ReMax of Ontario-Atlantic Canada.

Hottest in the province

The hottest market in Ontario? Windsor, which showed price growth of 13 per cent in 2018, to $299,750, with another 10 per cent increase forecast for 2019. London is also expected to be strong, with prices to increase another five per cent next year, after rising 17 per cent this year to reach $379,654.

 

Royal LePage says:

  • GTA average price in 2018 $844,000
  • GTA average price forecast to rise 1.3% to $854,552

“Compared to the record pace of home appreciation seen in 2016 and 2017, the GTA housing market is now positioned for much healthier and sustainable growth in future years,” says Chris Slightham, broker and owner, Royal LePage Signature Realty.

Many regions outside of Toronto’s core saw price declines in 2018, a result of overshooting in previous years. The continued population growth should cause the suburbs to stabilize and reignite price growth. In addition, the potential subway expansion into the suburbs should stabilize and increase home prices in close proximity to new transit infrastructure.

Elsewhere in Ontario

The median price in Ottawa is expected to increase 2.5 per cent in 2019 to $487,910, benefitting from the city’s healthy economy and high income per household, driven by the public and technology sectors.

Interestingly, Royal LePage also notes that neither the new mortgage rules nor recent interest rate hikes have notably affected Ottawa’s housing market.

 

Highlights from other Canadian markets

The star performer of all major Canadian markets in 2019? Montreal, according to Royal LePage.

“Quebec will out-perform the nation in 2019,” says President and CEO Phil Soper. “Like other regions of the country, the economy is strong and people are working. What is different is affordability. We have to remember that Montreal sat out the rapid home price inflation we saw in Vancouver and Toronto this decade, and in Calgary the decade before.”

As for the ReMax outlook for Montreal, Quebec did not participate in this year’s forecast.

 

 

Royal LePage Market Survey Forecast

Region  

2018 Aggregate Home Price
(Year End Estimate)


2019 
Aggregate
Home Price 
(Forecast)
Year-over-Year (%)
Canada $631,000 $638,257 1.2%
Greater Toronto Area $844,000 $854,552 1.3%
Greater Montreal Area $409,000 $421,306 3.0%
Greater Vancouver $1.28M $1.29M 0.6%
Ottawa $476,000 $487,910 2.5%
Calgary $484,000 $473,104 -2.3%
Edmonton $386,000 $378,691 -1.9%
Winnipeg $306,000 $309,829 1.3%
Halifax $321,000 $326,096 1.6%
Regina $327,000 $311,505 -4.7%

 

Influential factors

Now for more on those national factors that do influence real estate.

“I would call attention to two factors influencing our forecast that deserve special consideration,” says Soper. “Firstly, home prices are appreciating, albeit at a snail’s pace. Secondly, the Canadian market is supported by strong economic fundamentals, including a robust rate of new household formation and excellent employment growth.

“The future for Canadian housing remains bright, perhaps too bright. With an increasing number of gainfully employed people looking to put a roof over their heads, and the scarce availability of rental accommodation, policy makers in our major markets will once again be struggling with housing shortages. More than an affordable housing problem, we will once again be facing an overall housing supply crisis.”

As for interest rates, the Bank of Canada held its benchmark interest rate of 1.75 per cent on Dec. 5, citing a weaker than expected energy sector. Further rate increases are expected in 2019, making it more difficult for Canadians to buy a home in 2019.

The Bank forecasts GDP will increase 2.1 per cent in 2019, a modest increase over 2018, while Canada’s unemployment rate fell to 5.6 per cent in November, the lowest on record since 1976.

RELATED READING

5 things we can learn from real estate in 2018

7 factors that will affect GTA housing in 2019 – and 5 reasons to consider buying NOW

GTA moving into balanced market for 2019

GTA new home market gains further momentum in October

Delays in approval process contributing to housing affordability issue in GTA

What the GM plant closure means for Oshawa economy and housing market

 

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2018 web

5 things we can learn from real estate in 2018

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5 things we can learn from real estate in 2018

2018 web

With much of 2018 in the rear-view mirror, It’s been quite the year for the housing market in the GTA and elsewhere in Ontario. From sales and price fluctuations to supply concerns to rising housing costs. As 2019 approaches, here are five things we can learn from real estate in 2018.

 

1 Get used to the affordability issue

Get used to affordability challenges, especially in the GTA. This oft-cited issue is not going away any time soon, despite lobbying from the likes of the Building Industry and Land Development Association (BILD) and the Toronto Real Estate Board (TREB).

Key economic fundamentals such as population and employment growth will continue to drive housing market demand. Over the next decade, almost 700,000 first-time buyers will target the GTA or Hamilton markets, according to a report from the Ontario Real Estate Association. Meanwhile, the supply of new homes is not yet being addressed, which contributes to rising prices.

With recent interest rate hikes and other changes, sales and prices in the GTA saw some moderation in 2018. But this will be short-lived, and a return to price growth is expected.

 

2 Increased government involvement – finally

Government lobbying by BILD and TREB seems to be paying off, in the sense that the Province is increasingly aware of the issues facing the industry – and buyers.

Buyers, you may not realize it, but you should thank BILD, TREB and other associations for that.

In late November, Ontario announced it was committing to a housing action plan “to help create more housing faster, give people more choice and bring down housing costs.”

Like anything involving government, though, this process will likely be slow moving – meaning, some of the challenges, namely increasing housing supply – will take time to be resolved.

But at least the issues are on the agenda.

One real example of this improved awareness is Ontario’s recent plan to change the 40-year-old apprenticeship system in the province – a move the home building industry says is a “game changer.”

It’s a game changer because the new one-to-one ratio, a significant change from the existing 3-to-1 ratio, will enable home builders and renovators to more easily hire and train new apprentices. Besides creating more job opportunities for trades workers, the move also helps builders and renovators operate their businesses

 

3 Fixing on interest rates

The Bank of Canada raised its overnight rate three times in 2018 – January, July and October – to where it sits now, 1.75 per cent.

Canada’s major banks, as is usually the case, responded by immediately raising their own rates.

Naturally, all of this has Canadians feeling a little uneasy.

The Conference Board of Canada’s latest Index of Consumer Confidence confirms that rising interest rates and weaker wage growth have started to take their toll on confidence. With interest charges squeezing Canadian wallets and weakening wage growth offering little reprieve, consumers have become hesitant to make major purchases and are less positive about the state of their finances.

In its latest rate announcement on Dec. 5, the Bank of Canada noted that global economic expansion is slowing, and the effects of the “oil price shock” are being monitored.

“We expect that the Bank will not move the overnight rate until the effects of the declining energy sector are known,”according to interest rate comparison website ratehub.ca. “However, the Bank makes it clear that they still plan on raising the key interest rate in 2019, likely more than once.”

This moderated stance might put downward pressure on fixed rate mortgages, however, so Canadians may see better fixed rates in the coming weeks, ratehub.ca says.

 

4 Real estate is more local than ever

It’s a simple point that escapes some consumers: Real estate is local, and in 2018, it became more local than ever.

What do we mean?

Well, the Canadian Real Estate Association (CREA), Canada Mortgage and Housing Corp. (CMHC) and other major real estate bodies are mandated to oversee the national market.

So, when CREA issues a release that says Canadian home sales are down by X per cent, or when CMHC reports the national vacancy rate is down for the second consecutive year – and major media report such headlines – people tend to worry.

It’s essential to remember, however, that when you buy a home, you don’t buy the national market. You buy one house, on one street, in one neighbourhood, in one city and region.

If you live in Ontario, why do you care that Alberta’s ongoing oil industry struggles are pulling sales and prices down in markets in that province? Or that prices in Vancouver are even less affordable than in Toronto?

Forget the national headlines. Drill down into what’s happening in your market.

And why is real estate more local then ever? Because…

 

5 Lessons from Oshawa

General Motors Canada’s November announcement that it was closing its Oshawa assembly plant sent shockwaves not just through the province but all of Canada. To be sure, the loss of at least 2,500 jobs – not to mention untold positions in related suppliers – in a community of 170,000, is going to hurt. Hurt whom, and how badly, are the only questions.

This development should serve as a stark reminder to us all – of how important it is for cities to develop diversified, modern economies. Overdependence on any one ge, singular industries leads to overexposure in the case of downturns or, in GM’s case, outright shutdowns. It hurts the local economy, which impacts employment and wage growth, which impacts the housing market.

Oshawa, thankfully in recent years, has been diversifying its economy and expanding in technology, education and other industries. It will help, but the impact of the GM closure will likely play out over many months, if not years.

These developments could push housing in Oshawa into a buyers’ market, and prospective buyers could benefit from more options and softening prices.

In new homes, builders remain undeterred, encouraged by the longer-term growth and development throughout the Durham Region. Still, some may offer incentives such as discounts or inclusions to entice qualified buyers.

 

RELATED READING

GTA moving into balanced market for 2019

GTA new home market gains further momentum in October

What the GM plant closure means for Oshawa’s economy and housing market

New home buying opportunities abound in Oshawa and Durham Region

Where are interest rates headed in 2019?

 

 

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Ontario web

Ontario government commits to housing action plan

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Ontario government commits to housing action plan

Ontario web
Steve Clark, minister of Municipal Affairs and Housing

The Ontario government says it is committed to a housing plan that makes more good quality places to live available for “the hardworking people of the province.”

“In communities all across Ontario, people are struggling to find housing they can afford,” says Steve Clark, minister of Municipal Affairs and Housing. “We’re taking action to help create more housing faster, give people more choice and bring down housing costs.”

Ontario is knocking down barriers to people getting housing they can afford that meets their needs, through:

 

  • Legislation that would make new rental units exempt from rent control, effective Nov. 15, 2018, while preserving rent increase limits for existing tenants
  • Ending the previous government’s expensive and ineffective Development Charges Rebate Program
  • Seeking public input on ways the government can remove barriers to building the right kind of housing in the right places. This input will inform a broader housing supply action plan. The consultation includes a downloadable toolkit so community groups can host local roundtables and share their thoughts with the province.

 

The demand for housing in Ontario has risen rapidly in recent years, driven by strong population growth and low interest rates. However, the supply of housing has not kept pace, leading to higher prices and rents.

Building more housing will also help make Ontario more attractive to businesses and investors, restoring the province to its rightful place as the economic engine of Canada.

“High housing costs are a barrier to job creators, large and small, because employees need affordable places to live,” says Todd Smith, minister of Economic Development, Job Creation and Trade. “Making housing more affordable will encourage people to start and grow businesses, right here at home.”

BILD reaction

“The Building Industry and Land Development Association (BILD) of the GTA is very supportive of the development of a Housing Supply Action Plan for Ontario,” says David Wilkes, president and CEO. “Shortfall in supply is a key factor undermining housing affordability, increasing rents and creating barriers to home ownership. We applaud the Ford government’s commitment  to address key issues affecting the housing supply and ultimately the affordability of housing in the GTA.”

TREB approves

The Toronto Real Estate Board, for its part, applauds the Province’s announcement.

“The Toronto Real Estate Board applauds the provincial government for taking action to ensure that our city, region and province have an adequate supply and appropriate mix of housing,” TREB said in a release.

Nowhere are housing supply and mix issues more of a priority than in the GTA, where TREB’s 53,000 members operate, the association says. “TREB realtors work with home buyers and sellers every day and they see the challenges caused by inadequate supply and mix of housing.

“We look forward to participating in the provincial government’s consultation process on this issue and helping our region and province to remain one of the best places to live in the world.”

RELATED READING

Delays in approval process contributing to housing affordability issue in GTA

7 factors that will affect GTA housing in 2019 – and 5 reasons to consider buying NOW

5 steps to solving the housing affordability issue in Ontario

 

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Approval web

Delays in approval process contributing to housing affordability issue in GTA

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Delays in approval process contributing to housing affordability issue in GTA

Approval web

The former Ontario government’s growth policies have had the unintended consequences of lengthening the land development and approval process in the Greater Toronto and Hamilton Area (GTHA), negatively impacting housing supply and affordability.

This is among the key findings in the Greater Toronto and Hamilton Area Land Supply Analysis from the Building Industry and Land Development Association (BILD) and Malone Given Parsons Ltd. (MGP).

“Growth policies implemented by the former provincial government from 2006 and 2017 have reduced the amount of available land for new housing communities, increased land prices and have caused home prices to skyrocket,” says Dave Wilkes, president and CEO, BILD, referring to the 2006 and 2017 Growth Plans.

Read more: 5 steps to solving the housing affordability issue in Ontario

Read more: Pent-up demand for townhomes building in the GTA

Read more: GTA new home market shows some improvement in September

“Land use in the province of Ontario is highly regulated  and the 2006 and 2017 Growth Plan changes have slowed down the approval process to bring new land on stream for new communities,” adds Matthew Corey, principal, MGP. “Increasing the supply of new land for housing is subject to a process that can take as long as a decade or more.”

The analysis is intended to provide an accurate accounting of greenfield land supply in the GTHA and Simcoe, to determine if the 2031 population and job forecasts of the Growth Plan will be achieved.

Key observations

  • The percentage of available land that has been approved for new housing communities in the GTHA is 4.5 per cent and decreasing.
  • Some municipalities in the GTHA have yet to conform to the 2006 Growth Plan requirements, missing the 2009 target by nearly a decade, resulting in less housing being built across GTA municipalities versus Growth Plan forecasts.
  • As land supply dwindles and as municipal delays increase, the value of serviced land has increased by more than 300 per cent since 2006.
  • Existing low density neighbourhoods in the GTHA are resistant to intensification, pushing density to urban cores and to new communities near the fringes of the GTHA. The latter are far away from transit and infrastructure, putting a greater reliance on cars and increasing traffic congestion.
  • More gentle density homes (stacked-townhouses and lowrise apartments) should be built within walking distance of transit in built-up areas of the GTHA. This will maximize investment in infrastructure and transit. However, community resistance to increased density makes building in this area time-consuming, expensive and subject to intervention at the municipal level.

Recommendations

BILD and Malone Given Parsons offer six recommendations to help solve the issues:

  1. Make more vacant land available for new communities
  2. Cut bureaucratic red tape and reduce duplication in the planning and approval process
  3. Avoid pushing too much density to fringe areas and away from transit and existing infrastructure
  4. Encourage moderate or gentle intensification across the region by clarifying and amending Growth Plan policies to encourage intensification across the GTHA
  5. Maximize investment in transit and infrastructure
  6. Provide greater certainty for future development by identifying the agricultural and rural lands in the inner-ring (Whitebelt) as future urban areas in the Growth Plan.

 

 

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Construction

Ontario’s new apprenticeship ratio a boon to home building industry

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Ontario’s new apprenticeship ratio a boon to home building industry

 

Construction

The Ontario government’s plans to change the 40-year-old apprenticeship system is welcome news to the home building industry.

“This is a game changer,” says Rick Martins, president of the Ontario Home Builders’ Association (OHBA). “This means our industry will finally have a system in place to close the trades skills gap across Ontario. This means employers can finally bring apprentices into their small businesses and train the next generation of skilled trades workers. This opens thousands of new opportunities for youth, and people looking for new employment opportunities.”

COMPETITIVE BOOST

The new one-to-one ratio, a significant change from the current ratio of 3-to-1, will enable home builders and renovators to more easily hire and train new apprentices.

“The existing apprenticeship system in Ontario includes ratios that are among the most restrictive in Canada – this is why it hampers builders,” OHBA CEO Joe Vaccaro told Homes Publishing. “Most other provinces have had a 1-to-1 ratio for years, and as a result Ontario ranks last in Canada in the number of tradespeople with certification. The high ratio limits Ontario’s ability to compete and remain competitive.”

OHBA says it has been recommending lower apprenticeship ratios for about 10 years, to help make Ontario a competitive training and business jurisdiction and removing a major barrier for young people to enter the skilled trades.

“Ontario will grow by more than 4.3 million people in the next 25 years, and with that there will be an overwhelming need for skilled labour in the building and renovation sector,” says Vaccaro. “With this new apprenticeship plan, our members are now going to be able to hire and train the skilled workers they need to build the new housing choice and supply for future #homebelievers.”

For home builders and renovators employing carpenter apprentices, the current ratio of 3-to-1 means a company must have three licensed journeypersons on staff before they can hire an apprentice.

“This ratio may not be a reality that makes sense how builders and renovators operate their businesses,” says Vaccaro. “For example, they may not have the exact mix of employers to apprentices, or they may want to take on more than one apprentice but not have the proportionate number of staff to support additional apprentices.”

RELATED READING

5 steps to solving the housing affordability issue in Ontario

Home construction and renovation the largest contributor to Canada’s underground

economy

 

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Toronto

6 Ontario municipal elections to watch regarding housing

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6 Ontario municipal elections to watch regarding housing

Toronto

By Wayne Karl

The countdown is on – just days to go to the 2018 Ontario municipal elections. In Toronto, in what’s shaping up to be a two-horse race between Mayor John Tory and challenger Jennifer Keesmaat, housing is one of the key issues.

But it’s not the only city or town in and around the GTA where real estate development is a hot topic.

Here’s a select list of a few more municipal elections to watch, and we might as well start with the biggest and highest profile municipality:

TORONTO

Incumbent: John Tory
Challenger: Jennifer Keesmaat
What’s at stake: Housing affordability, or the lack thereof. Both Tory and Keesmaat have announced plans to address the growing affordability issue in the city – what some describe as a crisis. Keesmaat wants to build 100,000 units of “truly affordable, high-quality housing in the next 10 years.” This is a plan some sources in the industry have already declared as doomed to fail.

Tory proposes to build 40,000 affordable rental units over 12 years, or roughly 3,300 annually.

The challenge for both? Defining what affordable housing even is, in a city with median home prices of $883,892, andthe most expensive average one-bedroom rent in the country, $1,900 per month.

Home builders have been lobbying the City and the Province to address land supply and other policies which complicate this already complex issue.

 

MARKHAM

Markham

Incumbent: Frank Scarpitti
Challenger(s): Steven Chen, Shan Hua Lu, Abdul Rahman Malik, Jawed Syed
What’s at stake: As the fourth most populous community in the GTA after Toronto, Mississauga and Brampton, Markham has been a hotbed for economic growth and development for years. It has also become one the most expensive housing markets, with median home prices of almost $1 million for the third quarter of 2018, according to Royal LePageAnd Scarpitti, first elected in 2006 and known as developer- and builder- friendly, has been there through much of it.

 

BRAMPTON

Brampton

Incumbent: Linda Jeffrey
Challenger(s): Mansoor Ameersulthan, former Ontario PC Party leader Patrick Brown, Baljit Gosal, Wesley Jackson, Vinod Kumar Mahesan, John Sprovieri
What’s at stake: Brampton is booming, and Jeffrey is seeking a second term after winning the 2014 election with almost 50 per cent of the vote.

Vision 2040 is an ambitious long-term plan to reinvent Brampton, and includes transformations such as model new neighbourhoods connected by an expanding transit network, new core loop, walking and cycling networks, communities designed to promote walking, and a new eco-park and sustainability built into everything.

There’s also a significant education infrastructure project that will bring a new Ryerson University campus, with Sheridan College as an academic partner, to downtown Brampton for 2022. Oh, along with thousands of students.

 

ORANGEVILLE

Orangeville

Incumbent: Jeremy Williams
Challenger(s): Sandy Brown, Darrin Davidson
What’s at stake: Been to Orangeville lately? It’s no longer a sleepy little pit-stop town as you drive north to Collingwood or Georgian Bay.

With new home and community development taking place, particularly in the west part of town, the biggest challenge Orangeville faces is urbanization. Williams wants to preserve the small town feel and welcome development, while avoiding becoming a discount housing destination for people moving north out of the Toronto area.

Brown, a local realtor, likely understands the issues, and wants to “arrest out of control spending.”  He says Orangeville residents pay the highest property taxes in the GTA.

 

OSHAWA

Oshawa

Incumbent: Current mayor of Oshawa John Henry has given up his seat to run as Durham’s regional chair
Challenger(s): Kenneth Carruthers, Dan Carter, Joe Ingino, Adam Kunz, Sara Lear, Rosaldo Russo, Bob Rutherford
What’s at stake: In short, continued growth in population and economic diversity, which drive housing demand. Oshawa’s population grew to 379,848 in 2016, according to the 2016 Census, up 6.6 per cent from 2011. This is second in the entire province only to Guelph – and even ahead of Toronto at 6.2 per cent.

Oshawa is expected to boast one of the fastest growing economies in the province this year, with growth of 2.6 per cent, according to the Conference Board of Canada. And this is down from 3.2 per cent in each of the last two years.

In terms of housing development, several builders are active in the area with lowrise homes. Homebuyers are liking the comparative bargains and the proximity to Toronto.

 

BARRIE

Barrie

Incumbent: Jeff Lehman
Challenger: Ram Faerber
What’s at stake: Lehman is seeking his third term, while local businessman Faerber is looking to unseat him.

Barrie ceased being a weekend destination years ago, and has become a favourite among real estate investors for its population growth and the job opportunities that come with a growing and increasingly diverse local economy.

However, as a smaller centre (population of 197,059,up 5.4 per cent from 2011), Barrie is sometimes subject to market swings. Median home prices slipped five per cent for the third quarter of 2018, from the same period last year, to $505,136. Some shorter-term good news, however, is that prices are up 0.4 per cent from the second quarter of this year.

Wayne Karl is Senior Digital Editor at Homes Publishing. wayne.karl@homesmag.com 

RELATED READING

Keesmaat’s 100,000 housing plan doomed to fail

5 steps to solving the housing affordability issue in Ontario

Housing policies must focus on supply

 

 

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5 steps

5 steps to solving the housing affordability issue in Ontario

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5 steps to solving the housing affordability issue in Ontario

5 steps

Promising to create more housing supply was the first step, now industry leaders are calling on the Ford Government to action solutions that will bring much-needed supply into the marketplace and help solve the housing affordability issue facing many Ontarians.

This week, leaders from housing associations – the Ontario Real Estate Association (OREA), Ontario Home Builders Association (OHBA) and the Federation of Rental-Housing Providers of Ontario (FRPO) – gathered at the second annual Housing Summit event to examine bold policy prescriptions that will help Millennials get their hands on the keys to their first home.

“Keeping the dream of home ownership alive in Ontario requires bold policies and action from the provincial government,” says Tim Hudak, chief executive officer, OREA.

“First and foremost, to get more new homes in the marketplace, the building approvals process must be streamlined and zoning updated to allow for more homes in the right places. The best and fastest way to give Ontario’s first-time homebuyers a break is to eliminate the punishing land transfer tax for first-time buyers.”

“#Homebelievers know that government can support more housing choice and supply needed to make the great Canadian dream of home ownership a reality in existing, expanding, and established communities across Ontario,” adds OHBA chief executive officer Joe Vaccaro.

As advocates for greater home supply and home affordability in the province, OREA, OHBA and FRPO say the solutions to keeping housing within reach for young Ontarians include:

1 Speed up the planning approvals process

The home development approvals process can take up to 10 years in some parts of Ontario. Better alignment of municipal and provincial housing priorities, will get new homes to the market faster.

2 Build more homes and build them higher around and above transit stations

Use “As of Right” zoning to ensure housing intensification along rail transit lines and stations, exactly where many Millennials want and need them.

3 Provide first-time home buyer tax relief

Eliminate the land transfer tax for first-time homebuyers or dramatically increase the current rebate offered to first-timers.

4 Bring back the Ontario Municipal Board

The traditional role of the OMB has been to take the NIMBY out of housing decisions. Bringing back the OMB means evidence-based planning decisions, which will create more housing supply and choice.

5 Create new rental stock by reducing barriers and red tape

Adjust the annual rent increase guideline to CPI plus two per cent, implement a 20-year rent control rolling exemption on new construction and maintain vacancy decontrol.

RELATED READING

5 affordable neighbourhoods for detached homes in 416 and 905

Keesmaat’s 100,000 housing plan doomed to fail

The answer to affordable housing is supply, supply, supply

Build For Growth: Housing Affordability

 

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The View From Inside: Have Your Say!

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The View From Inside: Have Your Say!

Why voting in municipal elections is important

Canadians lives are greatly affected by the policies of, and decisions made by, our governments. Fortunately, we live in a country where we can express our views at all levels – by voting.

The upcoming municipal elections across Ontario offer an opportunity to influence local outcomes, and many feel, as I do, that voting is both a privilege and a responsibility. Municipal councils are elected to make decisions that affect us directly. Among these are the delivery of important services such as water, sewage treatment, waste collection, public transit, land use planning, emergency services, economic development, libraries, parks design – all of which have a lasting impact on our communities.

At Geranium, we see the effects of municipal election outcomes firsthand. Over 20 per cent of the cost of a new home is comprised of government fees and charges, which are set by elected officials.

A 2018 study by the Altus Group found that average government charges for a single-detached home in the GTA amount to $186,300, representing 21.7 per cent of the cost. Since 2004, development charges have increased across the GTA between 236 and 878 per cent. Of course, this is affecting the affordability of new homes.

Elected officials are also responsible for approving official plans, which provide guidance on where and what type of homes can be built. They approve zoning bylaws that control the standards for new home construction. These cover elements such as how far from the street a dwelling should be set back, how much of the lot can be covered by buildings and the spacing between houses.

The length of the process for these approvals affects the time to deliver new homes to the market. Local governments have an opportunity to streamline approvals, remove duplication and waste to facilitate timely home construction. They can also work with the building and development industry to meet the variety of needs in the community: people renting, first-time homebuyers, and those ready to scale down, to name a few. Ensuring there is an adequate supply of serviced land for the construction of new homes is an important role played by municipal councils. The complex development process requires careful planning and timely processing to ensure homes can be built in response to market need.

Local councils are also responsible for approving official plans that guide change in our neighbourhoods. They may identify new greenfield areas for development that require the extension of municipal services. They determine density targets to achieve intensification goals and earmark locations for intensification and redevelopment that can utilize existing infrastructure. They also set locations of parks and schools.

Whether or not you are in the market for a home, decisions are being made that may affect you now, or in the future. Each year, the building, development and professional renovation industry creates thousands of jobs and contributes billions of dollars to our local, provincial and national economy. Find more information at BuildForGrowth.ca. Take time to research the candidates running for election to find out whose values you share. Voting is a way of having a direct say about the future of our communities.

Cheryl Shindruk is executive vice president, land development for Geranium. Celebrating over 40 years in business Geranium has created master-planned communities including more than 8,000 homes in Ontario. Geranium.com

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THE ANALYST : Premier Ford: Seven steps to housing affordability

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THE ANALYST : Premier Ford: Seven steps to housing affordability

By Andrew Brethour
PMA Realty

It’s early in the mandate, but here are seven steps to relieving the price pressure and improving housing affordability in the GTA that Ontario Premier Doug Ford should consider. None of these ideas are quick fixes and each will require careful examination and implementation over several years. It took us 15 years to get into the untenable position we find ourselves in today and it will take a while to turn the “affordable ship” around.

STEP ONE

Supply, Supply, Supply

The last year of the housing supply study coordinated by our firm, PMA Realty, in consultation with CMHC, the Ministry of Housing and BILD was in 2003. The study was completed annually from 1997 and created a databank of net residual residential land supply covering 37 municipalities in the GTA. The total number of lots (low density) and units (high density) were identified as in process, at draft stage and in registered plans of subdivision. All zoned land was included but not yet identified.

Provincial policy at the time was to maintain a three-year supply in these three noted categories. Today, 15 years later, we have a three-month supply. The province introduced the growth plan in 2004 but never did an economic impact statement. In 2004, a serviced 40-foot lot sold for $2,500 per front foot, or $100,000. Today, that same lot — if you can find one — sells for $20,000 per front foot, or $800,000. This reckless and irresponsible escalation in the underlying price of land was driven mostly by provincial policy, not consumer demand.

Mr. Premier, step one is to re-institute the annual land supply analysis and clearly determine the current and projected supply of lots and units in the now Greater Toronto and Hamilton Area. By 2030, only 12 years from now, population growth is projected to move from six million to nearly nine million people. Without a barometer of supply, growth will stagnate and go elsewhere.

STEP TWO

Approval Process

The approval process takes too long and is too costly, further affecting affordability. Mr. Premier, review, streamline and deregulate the approval process. The GTA must compete on a North American, even global, basis for new employment opportunities. Many southern U.S. cities where growth is comparable to the GTA take a matter of months from land purchase to approval for construction. In the GTHA, it is an average of more than 10 years. Provincial policy should be set at a maximum of three years.

Mr. Premier, that is your challenge.

STEP THREE

Rent Controls

Mr. Premier, much has been written, studied, reviewed and “controlled” in rental housing, yet these controls have not produced more rental stock but, in fact, less. And the existing stock is crumbling.

Yet the divide between the “protected consumer” and the purpose-built rental developer is not that far apart. Rent controls were reset last year in the fair housing plan at an annual increase limit of 2 per cent. Rental buildings are financed over a 20 to 30 year project life period. An extra 1.5 per cent in annual rental increase would make the difference between thousands of projects being cancelled and thousands being built.

Mr. Premier, allow annual rent increases to rise to 3.5 per cent and you will be amazed at the amount of rental activity that will produce.

STEP FOUR

Hidden Taxes

The tax component of a new home was recently outlined in an excellent C.D. Howe Institute study — over $100,000 per unit in Ontario and over $150,000 per unit in the GTA. If we truly want greater affordability, it can be delivered with lower taxes and greater supply. As sales volumes have declined drastically in the last two years, the municipalities’ response to declining revenue is to increase the development charge. A Catch 22 when it comes to affordability.

Mr. Premier, examine municipalities’ ability to finance infrastructure with an underlying purpose to reducing taxes on new construction. Let’s look for alternatives. One might look at sewer and water infrastructure, currently financed by 30 to 40 per cent of the development charges on new homes. The real cost, in fact, subsidizes existing homeowners. Raise sewer and water rates on all housing to properly reflect the cost, which in turn will lead to greater conservation and more affordable new housing.

STEP FIVE

Replace the OMB

Mr. Premier, the new system introduced in the dying days of the Wynne government eliminated the OMB and replaced it with a Local Planning Appeal Tribunal (LPAT), where “not in it in my backyard” reigns supreme. This will further delay the approval process. Create a Provincial Dispute Resolution Panel with the oversight to look at the “bigger picture,” the provincial vision for housing density and affordability.

Mr. Premier, re-introduce the office of the Development Ombudsman so that disputes or delays are resolved or arbitrated before reaching the OMB or its replacement body.

STEP SIX

Modify the Planning Act

Re-introduce the ability of a developer to bring forward a plan from outside an urban boundary. Let the developer front the cost of services. The municipality can still say no. This provision was removed from the planning act in 2004, further constricting supply.

STEP SEVEN

The Hidden Supply – Employment Lands

Currently, Mr. Premier, employment lands are untouchable. They cannot be considered for residential use yet the very nature and scope of industrial commercial lands has changed dramatically in the last 15 years.

Introduction of Robotics and AI have modified the design and formation of today’s employment spaces. Malone Givens Parsons points out we have used only 34 per cent of available employment lands in the GTA. Conversely, we have used or allocated over 57 per cent of available residential lands. Integrating mixed-use development into employment lands would open up supply dramatically from the current rigid lines drawn on our municipal maps.

Just take a walk around existing older employment designated lands today and the potential supply jumps right out. An instant supply solution is available by potentially converting employment land to mixed-use residential.

Mr. Premier, study the implication and provide the supply solution.

So, there you have it, Mr. Premier, seven steps to improving housing affordability in the GTA.

Mr. Premier, start with theses simple Seven Steps and perhaps another “promise made, promise kept” is possible on the affordable housing file in your first term. Good Luck Mr. Premier!

Andrew Brethour is chairman and CEO of PMA Brethour Realty Group. http://www.pmabrethour.com/

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The best winter destinations outside of Toronto

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The best winter destinations outside of Toronto

You don’t have to escape Ontario to start enjoying the winter season; here are our favourite spots within driving distance of Toronto.

Winter isn’t over yet but that doesn’t have to be a bad thing. Rather than fighting it, why not embrace it? The winter season can be a great way to get out and explore some romantic spots outside of Toronto.

Pack your bags, grab your boots and hop in the car. We’ve rounded up our favourite spots for enjoying the snow and fresh air outside of Toronto.

Blue Mountain

Located only two hours outside of the city, Blue Mountain is the perfect spot for snow sport lovers. Modelled after Tremblant and Whistler, you’ll find posh restaurants, great shopping and tons of ski hills to keep you busy all weekend. With the season winding down, you may get some great rates to enjoy that last little bit of snow. Don’t forget to check out Scandinave spa if you’re going to be in the area — their outdoor “hot springs” and relaxing massages will definitely have you forgetting your weekly stresses.

Niagara-on-the-Lake

Known for being a great spot in the summer for wineries, Niagara-on-the-Lake is also a fantastic spot in the winter. Many of the wineries are still open and as an added bonus you won’t have to fight the crazy crowds like you often do in the summer months. Make sure to wander around the main strip in Niagara-on-the-lake for some shopping and fine dining. Enjoy afternoon tea at the Prince of Wales Hotel or get pampered at one of the glamorous hotel spas.

Ottawa Valley

Looking to get a little further outside of Toronto? Try the Ottawa Valley. The four-hour drive is worth it once you get there. Blanketed in snow, peacefully quiet and more fresh air than you can handle, the Ottawa Valley is a great trip for those who love the outdoors. A fun activity to try is Nordic skiing at the Opeongo Nordic ski club. This volunteer-run organization is free for everyone to use and absolutely gorgeous. You will also find some gorgeous snowshoeing trails at the Shaw Woods Outdoor Education Centre. Home to North America’s oldest forest, you may even find some amazing wildlife wandering around.

Buffalo

Let’s face it; some people just hate winter so much they want to escape from it. Where else would be best to go (besides down South of course) but Buffalo? Hiding inside the many different shops and malls in the area will make you forget the horrible weather outside. Plus, we all know that shopping is way more fun in the United States. If you plan your trip right, you may even catch the Leafs playing the Sabres for a good price.

What are you waiting for? Get booking!

Madisyn is a freelance writer and social media obsessed traveller based out of Toronto. Always looking for her next adventure but glued to her phone, you can contact her at madi@therestlessworker.com or visit her at www.therestlessworker.com

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