Lack of single family homes in established neighbourhoods key regional
factor driving up GTA home prices: new report
TORONTO, Dec. 2, 2013 /CNW/ - Home prices in the Greater Toronto Area
(GTA) continue to rise, in part because of the limited supply of
single-family homes in established neighbourhoods, according to Priced Out, a new report researched and written by the Pembina Institute and
co-published by RBC.
The report indicates there is no shortage of land in the GTA to
accommodate construction of single-family homes for a projected
population growth of 44 per cent over the next 25 years. However, land
available for development is predominantly located outside of the City
of Toronto and other major centres of employment in the GTA.
For homebuyers wanting to live in established neighbourhoods within the
GTA, the relative scarcity of affordable single-family homes has
shifted purchasers to more affordable multi-unit dwellings such as
condominiums. Dwellings with five or more stories accounted for 41 per
cent of existing housing stock in Toronto in 2011, while single-family
detached houses accounted for close to 25 per cent.
"Demand for single-family homes in established GTA neighbourhoods has
outstripped supply, which is driving up prices in these areas," said
Cherise Burda, Ontario policy director at the Pembina Institute. "Many
homebuyers are faced with a choice between a condo in a walkable and
transit-accessible neighbourhood, or a single-family home located in
car-dependent location."
Other factors that have affected home prices include a strong economy,
low interest rates and favourable mortgage rules. The report found no
evidence that provincial land use policies, including the Greenbelt
Plan and the Growth Plan for the Greater Golden Horseshoe, restrict
housing development and contribute to rising home prices.
RBC Economics notes in the most recent Housing Trends and Affordability Report that the GTA housing market has staged quite a healthy comeback so far
this year, despite affordability levels being slightly stretched.
"Housing affordability in the GTA remains much more manageable today
than in 1990 after an overheated market and a surge in home prices in
the late 1980s propelled the market into more challenging waters," said
Robert Hogue, senior economist at RBC. "Comparatively speaking, condo
ownership exerts less financial stress on homebuyers, which partly
explains the strong buyer interest in condos in the past several years.
Owning a single-family home at today's prices is a stretch for many
homebuyers in Toronto and desirable suburban locations."
The Priced Out report is part of a series examining the factors that influence how we
live in the city and suburbs. A 2012 report, the RBC-Pembina Home Location Study, found that more than 80 per cent of GTA residents would give up a
large home and yard to live in a "location-efficient" neighbourhood
that is transit-friendly, walkable and offers shorter commuting times.
However, more than 70 per cent of residents in the GTA live where they
do because of affordability rather than preference.
About the Pembina Institute
The Pembina Institute is a national non-profit think tank that advances
sustainable energy solutions through research, education, consulting
and advocacy. It promotes environmental, social and economic
sustainability in the public interest by developing practical solutions
for communities, individuals, governments and businesses. The Pembina
Institute provides policy research leadership and education on climate
change, energy issues, green economics, energy efficiency and
conservation, renewable energy, and environmental governance.
About RBC
RBC is the largest residential mortgage lender in Canada, helping
thousands of Canadians reach their homeownership goals - whether they
are buying their first home, planning their next move, renovating or
managing their current home financing. In addition, RBC offers
environmentally responsible products and services for clients, and
promotes responsible lending as part of its commitment to environmental
sustainability, detailed in the RBC Environmental Blueprint.
For a complete copy of Priced Out, the report is available here.
SOURCE Pembina Institute
