Tag Archives: Unaffordable

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Condo Market: Demand For Condos Grows Upward and Outward

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Condo Market: Demand For Condos Grows Upward and Outward

The proliferation of condominiums across Toronto and the Greater Toronto Area has been astounding over the past decade. Purchasers span the gamut from first-time homebuyers who find detached residences out of their financial reach, to professional couples, families, empty-nesters and retirees, all seeking the convenient lifestyle condos offer.

Once relegated to the City of Toronto, condominiums are popping up all over the GTA as well. The Altus Group statistics from July 2018 released by BILD show that there were 1,284 new condominiums sold in Toronto, while the total for Durham, Halton, Peel and York Regions was 795. Now, it looks as though this trend is spreading out to places beyond the 905 areas.

This is especially true for baby boomers. The Royal LePage Boomer Trends Survey (https://bit.ly/2KFIahg), released on August 8, shows that more than 1.4 million baby boomers (born between 1946 and 1964) plan to purchase a new home in the next five years. Over half of the people surveyed consider their current local housing market unaffordable for their retirement years, and 32 per cent responded that they will likely buy a condominium.

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The survey indicated that in Ontario, nearly half of the respondents said they hope to move to a smaller home to downsize (or as I prefer to say, right-size) their lifestyles. Most boomers in Ontario have a preference to moving into a smaller detached home, yet 46 per cent said they would consider a condo. With 40 per cent saying they would be willing to move to a new city or suburb for more affordability, Ontario has the highest rate in Canada. In fact, 32 per cent of those respondents would even consider moving more than an hour away from where they currently live.

Greater Toronto Area developers who have been focusing on building condos in the 905 areas will likely find this trend agreeable, as boomers move from homes in urban Toronto to locations that offer affordability and a more laid-back lifestyle. Places such as Barrie, Innisfil, Peterborough, Grimsby, Orillia and the like will probably see their condominium rosters increase with new buildings.

We tend to read a lot about first-time homebuyers turning to condos for affordability, but a lot of this trend has to do with boomers discovering the retirement savings they thought would carry them comfortably into the future will not take them as far as they thought, in the style to which they are accustomed. Plus, nine per cent of the total boomers surveyed expect their children to stay at home until after the age of 35, which adds to their dilemmas. It is easy to understand why condominiums are in such demand with this demographic.

This also supports my continual comments that condos are a driving force in the housing market and will continue to be for quite some time.

BARBARA LAWLOR is president and CEO of Baker Real Estate Incorporated, winner of the pinnacle 2017 Riley Brethour Award from BILD, and an in-demand columnist and speaker. A member of the Baker team since 1993, she oversees the marketing and sales of condominium developments in the GTA and overseas. Keep current with The Baker Blog at blog.bakerrealestate.com

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Perspectives: It’s Time To Demand Change

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Perspectives: It’s Time To Demand Change

Government intervention has spooked the market and made housing unaffordable for most

There is no denying that the climate of home sales has changed from just over a year ago. Nearly every media outlet jumps at the opportunity to sensationalize the year-over-year comparison statistics. To their credit, those statistics do depict a drastic change in the numbers. Unfortunately, the year-over-year comparison seems to be all that they are focused on. In what has become a vicious news cycle, this narrow scope unjustly pushes the market further down the road from reaching its equilibrium and for that reason I will attempt to speed up the process.

What we know is that the first quarter of 2017 was without doubt the hottest the market Southern Ontario has recorded, which was not healthy or normal but it was a natural result (more on that later). This all came to an abrupt halt with the introduction of the province’s 16-point Fair Housing Plan, also know as government intervention. The plan has successfully spooked the market, but has done little in accomplishing the “fairness” it set out to do. Couple this with the increased mortgage regulations stress test, and what we witness in the year-over-year data is easily explained.

Furthermore, the severity of this data has been exacerbated because it happened at a time when many baby boomers were putting their next step into motion. First-time buyers who were poised to benefit from this rare moment in time cannot capitalize because the net affect of the stress test results in the equivalent of having no price adjustments at all.

Those who made future plans under fair market conditions are now faced with the fallout of the unfair consequences, which stem from a sudden market intervention. Ironically, one that was devised to compensate for the issue that drove prices up in the first place — lack of supply.

The simplest and very first lesson in economics is that of supply and demand. If there is an imbalance in either, price adjustments will occur until equilibrium is naturally met.

An appropriate approach to creating fair housing should have started years ago. Once population growth targets were set and being realized, an adjustment to the policy and the approval process allowing for housing to come to market quicker should have been made. As it currently stands it takes a developer south of the border mere months from purchasing land to selling and building homes, meanwhile in Ontario this same process will take several years at minimum. Our population has been growing according to plan while our housing supply has been shrinking.

So what does this all mean? It means that despite a challenging moment for understanding the home market, in the long term demand will still outpace our lack of supply.

Leave the year-over-year statistics behind and focus on the future. In the immediate term there is a slight edge to buyers in certain places who are ready and able to qualify — but don’t hesitate as prices will soon resume their rise. If the entire market wants to avoid future turbulence we all need to voice our desire for a change of Wynn’d.

Fraser Wilson is the vice president of International Home Marketing Group (IHMG), a fully integrated sales management and marketing company. IHMG.ca

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Industry Report: Lack of Missing Middle Making real estate Increasingly Unaffordable

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Industry Report: Lack of Missing Middle Making real estate Increasingly Unaffordable

Shortage of shovel-ready land is impeding GTA’s ability to build complete communities

The GTA is in danger of becoming the next London, Hong Kong or New York City — highly desirable cities but unaffordable for most people.

Much of the dramatic increase we have seen in the prices of new homes, resale homes and rentals is the result of supply being outstripped by demand. The population of the GTA has grown significantly, but housing supply has not kept up.

An answer to this supply crisis may lie in building our way to affordable housing much like Tokyo has. The Japanese city has made home construction easy; zoning laws grant landowners greater flexibility to do what they want with their property, allowing them to use their land with little pushback. With a growing population of 13 million, builders constructed more than 142,000 homes in 2014, making it possible to purchase a detached single-family home near the city core for $300,000.

Housing options for people living in the GTA have been either large expensive lowrise dwellings or smaller highrise condos. What we’re missing in the GTA are townhouses, triplexes and midrise buildings.

Montreal has embraced the power of this “missing middle.” Developers are building lowrise dwellings, mostly three-storey flats and midrise apartment buildings within the city and in the suburbs, making Canada’s second-largest city more affordable than Greater Vancouver.

The homebuilding and land development industry wants to design and build homes and communities much like Tokyo and Montreal that meet the housing needs of the GTA. That is our business, that is what we do — but it is getting harder as challenges grow in number and scale. Complicated and restrictive government policies, already lengthy yet still worsening approval processes, a shortage of shovel-ready and approved land on which to build, escalating land prices and the growing issue of NIMBYism (not in my backyard) are impeding our ability to build homes and communities.

Excessive red tape and increasing delays in planning approvals are another huge challenge. Across the GTA it is taking longer and longer to get the go-ahead for projects. A typical new lowrise development can take a decade or more and highrise projects can take up to seven years.

The approvals process is further delayed due to zoning bylaws in many GTA municipalities that have not been updated for decades. All new development applications must conform to area zoning bylaws to get approved but unfortunately many municipalities are operating with badly outdated bylaws that don’t align with provincial intensification policies.

It’s time for government to take action to address our housing supply problem. Across the GTA, the planning approval process needs streamlining to remove red tape, pre-designate and prezone land and approve all outstanding environmental assessments that relate to critical infrastructure. As well, zoning bylaws need updating to support intensification policies — policies that need to be supported with public education.

This is not a time for small plans. It’s time to work together and address our housing supply crisis so that today’s new homebuyers and future generations have somewhere to live.

Bryan Tuckey is President and CEO of the Building Industry and Land Development Association (BILD) and is a land-use planner who has worked for municipal, regional and provincial governments. He can be found on Twitter (twitter.com/bildgta), Facebook (facebook.com/bildgta), and BILD’s official online blog (bildblogs.ca).

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