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Tag Archives: tax revenues

Trends reveal we’re growing smartly

Stephen Dupuis – Yourhome.ca

RealNet Canada Inc. recently released the year-end new home sales totals for the Greater Toronto Area market. When all was said and done, there were 36,803 new homes and condos sold in the GTA last year. To put that sales total in perspective, it was better than 2009 (by 8%), it was better than 2008, and it was better than all the expert forecasts for the year. That said, it was also the third lowest total since 2000.

While 36,803 units is a healthy number from the standpoint of jobs, investment and tax revenues for all levels of government, it certainly doesn’t justify any of the talk about slowing down the housing market, never mind the actual intrusions.

Getting back to the numbers, sales of lowrise homes, primarily in the regions, were off by 10%, year/year, while sales of highrise condo suites were up 30%, resulting in the overall gain of 8%. The 20,349 new condos sold in 2010 amounts to the second best year ever for highrise condo sales (2007 was tops).

I want to highlight three other numbers from the year-end stats that might surprise a lot of readers, as they reveal that we are growing rather smartly in the GTA.

First of all, 45% of all GTA new home sales last year were within the City of Toronto proper (416 area Code). That’s double what it was ten years ago.

Secondly, 55% of all new home sales in the GTA last year were highrise in form. Ten years ago, the highrise market share was 25%.

Thirdly, the%age of new home sales accounted for by single-detached homes was a mere 27% last year. That’s down from 43% in 2000.

According to newly elected BILD chair Paul Golini, of Empire Communities, these trends tell him that the Greater Golden Horseshoe Growth Plan is working, but he highlighted a fourth fact that suggests the plan may be working a little too well, and that’s the fact that the lowrise price index crept up over $500,000 last year, ending up at $503,190.

“When you begin to think of a half a million dollars as the price of entry into lowrise living in the GTA, you realize that something has to give. It’s no secret that we are suffering from a severe shortage of lowrise lots in the GTA. The RealNet statistics reveal about a six month supply of lowrise homes at current rates of absorption, which tells you why prices are what they are. Dirt has become more valuable than gold,” Golini stated.

Golini believes that part of the problem is a refusal to face the reality that additional lands may have to be opened up for development to accommodate future growth. “The numbers demonstrate remarkable progress by the industry toward Provincial goals. The only place we could improve is for more of that high-rise construction to move out to the 905 Regions, however there are some serious obstacles including development charges and parkland dedication requirements that stand in the way,” he said.

“While BILD remains fully supportive of the Growth Plan as a framework for determining what gets built and where, we remain frustrated that things aren’t happening fast enough with conformity as well as infrastructure approvals,” Golini concluded.

PAUL GOLINI’S RESPONSE TO REALNET’S YEAR-END REPORT

I would like to make a comment on the 36,000 new home sales that took place in 2010. Considering most of these were highrise units, which typically take months before they translate into construction starts and building permits; considering that many of the lowrise sales occurred in the second half of 2010, we can confidently expect these sales to drive real economic growth in the GTA in 2011, resulting in real job growth and a substantial contribution to local GDP.

Now, I want to focus on three numbers:

• 45% is the share of the GTA new home market, which the 416 area code (i.e., Toronto) commands. That’s double what is was 10 years ago. And that tells me that the Provincial Growth Plan is working.

• 55% is the highrise market share of the GTA new home market. Ten years ago, the highrise market share was 25% and we thought that was normal. Welcome to the new normal. And again, that tells me that the Provincial Growth Plan is working. For the plan to be working even better, we’ll need to see more of that highrise activity in the 905 regions but there are some obstacles, including development charges and parkland dedication requirements that stand in the way.

• 27% is the single-detached home share of the GTA new home market. That’s down from 43% in 2000, and again that tells me that the Provincial Growth Plan is working, perhaps a little too well. As George (Carras, president of RealNet) has said, you can’t sell what you don’t have, and right now the industry doesn’t have enough inventory of lowrise lots, resulting in an index price north of a half a million dollars. It’s not that homebuyers don’t want the choice of a single-detached home, it’s a question of affordability.

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Contact the Jeffrey Team for more information – 416-388-1960

Laurin & Natalie Jeffrey are Toronto Realtors with Century 21 Regal Realty.
They did not write these articles, they just reproduce them here for people
who are interested in Toronto real estate. They do not work for any builders.

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