Photo: Benson Kua
The rising cost of home ownership was a recurring theme at the State of the GTA Housing Market briefing, an event hosted by the Building Industry and Land Development Association (BILD) and the Toronto Real Estate Board (TREB) today.
“Affordability of housing in this region is a very important issue,” said Bryan Tuckey, BILD’s president and CEO, during the hour-long discussion at the King Street West office of RealNet, a real estate data firm.
During his presentation, Tuckey cited a recent Ipsos poll that found 70 per cent of Greater Toronto Area (GTA) residents were concerned about affording their next home.
The event underscored how supply and demand is pushing up home prices across the GTA.
TREB data was presented showing the index price for MLS-listed single-family homes was $669,400 in October, up 84 per cent from the same month in 2005.
Jason Mercer, TREB’s market analysis director, commented on how single-family housing inventory levels dropped considerably during that same period.
“At the end of 2005, months of inventory was sitting at three months,” he said, adding that as of this October that number had fallen to 1.5 months.
New detached 4-bed home in Richmond Hill cost $430k in 2005. Today that home is $1.18 mil and $430k gets you a 3-bed townhome in Whitby
— BILD (@bildgta) November 25, 2015
Months of inventory refers to how long it would take for the current supply of listed homes to sell out if sales continued at the same rate as a given month.
“That underpins how much tighter the market has gotten over the last decade,” he said of the data.
George Carras, RealNet’s president, noted how new high-rise unit prices have remained “relatively flat” despite per-square-foot prices rising 80.5 per cent over the past decade.
“So how does one keep prices flat when [per square foot] unit prices are rising?” You find efficiencies in design and units become smaller,” he explained.
Meanwhile, Steve Deveaux, BILD’s chair, put the cost of housing in perspective.
The average price of a new detached home in the GTA was $962,312, according to RealNet. It would take a family income just shy of $175,000 to comfortably finance a home of that price with a 20 per cent down payment.
“Housing affordability is an issue for all of us,” he said.