Photo: James Bombales
Is the affordability picture in the already-expensive GTA housing market getting even worse for homebuyers?
While the market has cooled considerably from its heights in the spring of 2017, tight market conditions have many residents worried about affordability deteriorating further.
For a closer look at which factors could be impacting the situation, Livabl has rounded up the latest industry commentary, to keep you in the know.
A low level of supply
This week, a new poll released by the Building Industry and Land Development Association (BILD) and the Toronto Real Estate Board (TREB) found that 94 per cent of respondents between the ages of 18 and 35 reported feeling concerned about the ability of today’s youth to afford a home in the GTA.
According to BILD president and CEO Dave Wilkes, government policy should focus on the supply-side of the housing equation, in order to bring prices down and ensure there is plenty of relatively affordable housing for would-be buyers.
“There has been an over-emphasis on the demand side, and we really need to look at some of the current conditions to ensure proper supply comes on stream,” Wilkes tells Livabl.
A lack of mid-density housing
Those worried about a lack of housing supply in the area have long suggested that a focus on mid-density housing could offer a potential solution.
In a new report, the Ryerson City Building Institute found opportunities for the creation of 174,000 mid-density homes through the densification of the Mississauga’s existing low-density areas. The report states that a similar approach could be taken in cities throughout the GTA.
Currently, municipalities across the GTA have zoning rules that make it difficult to build up existing single detached neighbourhoods.
“This intensification could take the form of low-rise apartments, multiplexes and accessory dwelling units such as laneway suites or side-yard suites,” reads the report.
A tightening market
Meanwhile, the GTA market continues to tighten, with new listings dipping 3.1 per cent year-over-year last month.
“As the GTA population continues to grow, the real challenge in the housing market will be supply,” wrote TREB president Garry Bhaura, earlier this week.
Home prices rose 2.9 per cent year-over-year to an average sale price of $796,786, with condos performing particularly well. The average detached home sold for $1,008,361, down 0.6 per cent year-over-year, while the average condo sold for $570,140, up 10 per cent year-over-year.
Would-be home buyers should brace for price growth to continue, according to Royal LePage Signature Realty sales representative Cam Woolfrey.
“When you start looking at 10-year averages, I think prices are heading in a more healthy direction, as opposed to the large peaks and deep valleys we’ve seen over the last year or so,” he told Livabl last month. “In markets like Toronto, where there’s still strong demand, prices will continue to move upwards, but at a more moderate pace.”