Photo: James Bombales
Over the past two decades there has been a dramatic shift in the Canadian housing market towards condo construction, with new single-family homes becoming scarcer and scarcer as high land values and government policy encourage density.
This recently led one top economist to proclaim “no more detached homes for you.” The change has been especially dramatic in the Greater Toronto Area, where in early 2017 there were fewer than 1,000 new single-family available for purchase.
While a new near-term forecast from real estate data firm Altus Group doesn’t peg ground-oriented home construction to rise anywhere near pre-recession levels, it does suggest homebuilders will ramp up low-rise groundbreakings within the next two years.
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Altus Group predicts that this year contractors will break ground for 11,550 single-family homes in the Toronto census metro area, which is similar in size to the GTA but does not include some areas such as Burlington. That figure includes detached and semi-detached houses as well as row units such as townhomes and is roughly unchanged from 2018.
But in 2020, that number is projected to rise to 15,600, just shy of the average for the 2009–2018 period albeit well below the 25,000–35,000 single-family housing starts observed pre-recession.
“We have a lot of single-family lands in the GTA,” Peter Norman, Altus Group’s chief economist, tells Livabl. Parts of Oakville, Durham and York Region will be ready for low-rise development around the forecast period, he says.
Norman suggests that municipalities in the Greater Golden Horseshoe struggled to adapt quickly to the groundswell of change that came with Ontario’s Places to Grow Act, which was introduced in 2005 and favours higher-density housing in areas well-served by transit. Multi-family home construction continues at a faster rate than what’s seen in the single-family segment, with workers estimated to begin work on 27,000 multi-family units, including stacked townhomes, this year.
However, now, nearly 15 years after the policy was introduced, increased availability of developable land zoned for single-family homes should boost construction somewhat as Millennials enter their family-forming years, stoking demand for larger dwellings with yards.
The Building Industry and Land Development Group (BILD), a development industry lobby group that Altus provides data to, has long called on the provincial government as well as municipalities to change policies in order to speed up the development approval process and unlock land for new housing by providing essential infrastructure.
The Doug Ford-led Progressive Conservatives are mulling changes to Ontario development policy, a factor supporting Altus Group’s’ bolstered forecast for single-family housing starts in 2020. “We’re likely to see some tinkering that will assist with approvals,” Norman adds.