Last year’s GTA home sales rose more than 40% over 2013

George Carras – Toronto Star

The Greater Toronto Area new-home market experienced a strong recovery in 2014. A total of 39,736 new homes were purchased last year, representing an increase in unit sales of 41% from 2013.

Comment: Recovery? The market was never down.

Total market activity was more than $23 billion.

Sales of new homes in 2014 outpaced supply in both the low-rise segment — which includes detached, semi-detached and townhomes — and the high-rise segment including condos, lofts and stacked townhomes.

These results speak to the market extremes that have been created as the growing GTA closes out its first decade under the province’s pro-intensification growth plan, called Places to Grow, for the Greater Golden Horseshoe region.

In accordance with the growth plan’s push to grow up, not out, there’s been a fundamental shift by builders toward high-rise development. The evidence of this is the record 25,571 new condominiums completed in the GTA through 2014.

Comment: Oh give it up. The shift to high-rise development is more of a consumer choice than the result of government regulation. People want to live downtown more than in the suburbs. Just because that shift occurred at the same time as the Places to Grow Act does not mean they are connected. Witness all the new housing in Ajax through to Oshawa, Seaton in Pickering, huge developments in Markham, all the way out to Brampton and Vaughan. Lots of new low-rise housing is being built – but more high-rise is being built.

There’s been a corresponding shift away from traditional low-rise development. That slowdown in house building, combined with long-term supply constraints and rising costs have resulted in a new record high for low-rise prices: $705,813.

Comment: That and the simple increase of all housing over the past decade.

The past year also saw the ever-growing price gap between low-rise and high-rise homes in the GTA hit a new record: $251,337.

This has meant neighbouring regions, such as Hamilton/Niagara, Kitchener/Waterloo/Cambridge and Simcoe/Barrie/Peterborough, are becoming integrated into the GTA housing market.

Comment: What? That has to do with growth, sure, but has NOTHING to do with the house-condo price gap.

Buyers seeking affordable ground-oriented housing are heading to these adjacent markets, where the price of a new detached home can be $305,000 for a new detached homes. Consider that versus the cost in western parts of the GTA, where the average is more than double that in the outlying areas.

The GTA is expected to continue experiencing strong growth going forward, with another 2.4 million people anticipated to arrive in the region in the next quarter century. That’s a population roughly the size of Vancouver, and all of those folks will need to be housed.

Comment: Which is the main reason the Toronto real estate market is going to stay strong. Demand is just not going to stop.

The housing market we see today was completely re-shaped by an ambitious plan introduced by the government a decade ago — testament to the power of policy.

Comment: No, it wasn’t. It was shaped by the arrival of 100,000 new residents every year who were used to high-rise living, or wanting to rent or not having enough for a house. It was shaped by the Boomers’ kids who wanted to love downtown and not in the suburbs. It was shaped by rising housing prices that made condos more affordable than freehold houses. The current real estate market was shaped by many things, government policy being very very far down that list, if it is even on it at all.

So it is essential we apply the lessons learned over the past 10 years to ensure that the market we see in 2025 continues to be healthy and sustainable.

And there’s no “they” in this formula, by the way. All of us — consumers, industry and government — need to remember that we together as we move toward this future.

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Contact Laurin Jeffrey for more information – 416-388-1960

Laurin Jeffrey is a Toronto real estate agent with Century 21 Regal Realty.
He did not write these articles, he just reproduces them here for people who
are interested in Toronto real estate. He does not work for any builders.
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