Photo: James Bombales
While most of Toronto’s housing market is off to a cooler start this January, many industry experts are predicting that tight economic fundamentals will keep the new construction market strong. The number one factor driving that strength? According to one industry expert, it’s a booming population.
“We’re poised to see 100,000 people moving into the GTA on an annual basis,” Building Industry and Land Development Association (BILD) president and CEO David Wilkes tells BuzzBuzzNews.
According to Wilkes, huge population growth will drive demand for new construction housing in Toronto to new heights in 2018. Having joined BILD as president and CEO in December, Wilkes says one of his main priorities is to lobby municipal governments to update their official plans to allow for further densification.
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“We need to ensure that supply is being brought onto the market to fulfill the demand that we’re seeing in the region,” Wilkes says. “In many municipalities local zoning bylaws prioritize single family structures, as opposed to multi-family units — that has to change in order to facilitate the growth we need in the region.”
There’s certainly a demand for multifamily units on the market. According to Altus Group data, condos made up 82.5 per cent of new homes sold in 2017, while single-family homes made up only 17.5 per cent of homes sold, the lowest number on record since 2000.
And supply continues to be tight — at the end of December, there were only 11,397 new homes available for purchase, down 13.2 per cent year-over-year and 60.3 per cent from the 28,738 homes available in 2008.
As market conditions tighten, many first-time buyers are getting priced out of the new construction market.
“While many end user buyers have been looking to the new condominium apartment sector for more affordable homes, some are now starting to be priced out of this segment as well,” wrote Altus Group executive VP of research consulting services Patricia Arsenault, in a recent statement.
Despite supply concerns — and the rising prices that come with them — Wilkes insists that 2018 is an “exciting time” for the Toronto new construction market.
“I think in the next year you’re going to see really interesting and innovative new product come onto the market,” he says. “Different buildings built for dense global cities like Toronto — and that’s an exciting place to be.”