Housing supply

WILD: Housing supply in the GTA is tight to last for the foreseeable future

Real estate in the Toronto area is in the midst of an affordability crisis that can only be resolved through government cooperation, says TRREB

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Average home sales prices, listings and transactions increased in Toronto and the GTA in September.

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Good for sellers, less good for buyers.

The local real estate market has settled into a perpetually tight supply cycle the likes of which we have not seen in years and is forcing many potential buyers to take an extended break or give up on finding a home altogether.

The latest report from the Toronto Regional Real Estate Board (TRREB) highlights the fact that tight conditions in the GTA housing market are maintaining strong price growth heading into the fall.

August saw 8,596 sales with an average sale price of $1,070,911, but an expected rebound in September saw sales rise to 9,046 and the average sale price to $1,136,280 – gains not seen since last spring.

Compared to last year, market conditions have tightened significantly, with sales accounting for a significantly higher share of listings and a significantly lower number of new listings across all areas.

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On the ground, we may not see as many frantic bidding wars and bullying bids as the more overheated months earlier this year, but sellers are still on the alert.

And many buyers, especially first-time buyers, find it difficult to get their foot in the door.

Persistently weak housing supply in Toronto and the GTA is a key reason house prices remain at such high levels – a scenario that will likely continue for the foreseeable future.

“Demand remained incredibly robust throughout September with many qualified buyers who would buy a home tomorrow provided they could find a suitable property,” said Kevin Crigger, chairman of TRREB.

Crigger has been saying for months now that the Toronto and GTA real estate markets are in the midst of a housing affordability crisis that can only be resolved if all three levels of government collectively consider long-term solutions.

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“With new listings in September down a third from a year ago, buying a home for many is easier said than done,” Crigger said.

“The lack of housing supply and choice has reached a crisis point. Band-aid policies aimed at artificially suppressing demand have not been effective. This is not a problem that can be solved by one level of government alone. There must be federal, provincial and local collaboration to find a solution.

Easier said than done.

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Municipal fees and charges represent a significant portion of new housing prices.

Red tape sometimes stalls new projects for years and developable land in and around the GTA is scarce.

Moving up is still an option, but tight supply and rising prices continue to define the Toronto condo market.

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TRREB’s second quarter condominium market report released in July showed that the average selling price of condominium apartments rose 10.8% year-over-year in the second quarter of 2021, reaching a hefty amount of $686,312.

This also represents an increase of more than 6% compared to the previous three months.

In the City of Toronto, which accounted for almost 70% of condominium transactions in the second quarter, the average selling price was $721,109, up 9% from a year earlier.

“September price growth continued to be driven by low-rise segments, including single, semi-detached and townhomes,” said Jason Mercer, chief market analyst at TRREB.

“However, competition among buyers for condominium apartments has accelerated significantly over the past year, which has led to an acceleration in price growth in recent months as first-time buyers return to the market. of the property. Look for this trend to continue, Mercer said.

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Fast forward to 2022 and industry experts are eager to hear how housing affordability will be addressed next year when our provincial and municipal elections begin in the province.

“Housing was a key issue in last month’s federal election. Ontario provincial and municipal elections are on the horizon in 2022,” said TRREB CEO John Di Michele.

“A lot of the heavy lifting needed to get more housing online, from a policy perspective, happens at the provincial and local levels,” Di Michele said.

“These levels of government need to be on the same page. This should be an important topic of debate in the next election.

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One thing homebuyers can bring to the bank is that the market doesn’t look like it’s about to correct course anytime soon.

Patience, preparation, and taking the time to save and research target neighborhoods will pay off for today’s buyers.

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