One of the key factors driving home prices up in the GTA is a shortage of single-family homes in established Toronto neighbourhoods, according to a new report by the Pembina Institute and co-published by RBC.
But while this shortage of homes is a major contributor to the rising prices, the report, titled Priced Out, states that there is no shortage of land in the GTA to build single-family dwellings — the available land is just primarily located outside of the City of Toronto and other major centres of employment within the GTA.
Furthermore, the report found that provincial land use policies like the Greenbelt Plan do not restrict housing development and have not contributed to the rise in home prices. Available land in the GTA can accommodate single-family units over the next 25 years even with projected population growth at 44 per cent.
So why do prices continue to rise? The report says that Torontonians prefer to live in established and conveniently-located neighbourhoods (think: amenity-rich neighbourhoods with shorter commutes) where land supply is limited. Those looking for more affordable homes in those neighbourhoods have set their sights on less expensive options like condominiums.
“Demand for single-family homes in established GTA neighbourhoods has outstripped supply, which is driving up prices in these areas,” Cherise Burda, Ontario policy director at the Pembina Institute said in the report. “Many homebuyers are faced with a choice between a condo in a walkable and transit-accessible neighbourhood, or a single-family home located in car-dependent location.”
The Pembina report also attributed rising home prices to historically low mortgage rates attracting more homebuyers to the market and a strong economy.
Here are a few more fast facts we pulled from the report:
- Based on projections, 81% of land available for development in the GTA will still be unused by 2031. (Tweet this)
- Roughly 52,000 hectares of land are still available to assist growth beyond 2031 without obtrusion into protected Greenbelt.
- In 2011, buildings with five or more storeys made up 41% of all housing in Toronto versus single-family detached homes that accounted for about 25% of all units.
- One acre of suburban development space that once held three to four units now holds as many as 11.