As the weather begins to get warmer and the daylight lasts longer, the real estate market will be getting busier. Since 2016, a number of cities in Canada have been dealing with an abundance of issues. For Toronto, it has been a shortage of supply, and the inability to afford what is available on the market as prices increase.

Other cities around the country have been working on slowing price growth, while others are trying to recover from economic struggles in the housing sector. Each province has had to deal with their own economic and market-specific challenges through 2016 and the beginning of 2017.

Focusing on the Golden Horseshoe (the Greater Toronto Area, Hamilton-Burlington, Oakville-Milton, Guelph, Kitchener-Waterloo, Cambridge, Branford, the Niagara Region, Barrie, and nearby cottage country), the current trends in the real estate market look like they are here to stay, with the double-digit price growth. As a result, it will continue to limit the affordability of homes as well as the sales, seeing as there is no rise in the supply of homes. The Canadian Real Estate Association (CREA) believes this will continue to be the case in the Spring season.

Government Involvement

The provincial government has become pressured to step in, in order to assist in fixing these issues in the real estate market. They have a number of options to address home affordability, which can help young families achieve the dream of owning a home:

1. Fix the Growth Plan

– Allow flexibility and more choices for municipalities such as family homes and townhomes to assist growing families and empty nesters.

2. Improve Planning Approval Processes

– Align priorities. For example, updated zoning.

3. Address “Missing Middle” Housing Supply

– Modernization of zoning laws for the housing supply in established communities. Create solutions like laneway housing, multi-unit homes (townhouses, stacked flats, mid-rise buildings).

4. Target Infrastructure to Support New Housing Supply

– Support new housing supply and targeted infrastructure investments, making houses available for consumers.

The OHBA and OREA have said to both agree that sustainable, long term solutions are necessary to the affordability issue, and it starts with increasing the housing supply. Both associations are appealing to the provincial government to take stock of the supply problem and to design solutions that will improve the affordability for all Ontarians.

(Source: OREA Press Release)

Foreign Buyers in Toronto & Vancouver

As the reports have been in the past, there has been a strong presence of critics stating that foreign buyers are not an issue in Toronto. In 2016 foreign buyers were seen to only makeup around 4 – 5 percent of transactions, stating the tax on foreign purchases will not provide a long-term solution to Toronto’s supply problem. To make matters worse, the National Housing Strategy is a federal initiative that will be released this year to address issues in provincial and regional economies, and housing markets and conditions. Add this to the current issues at hand, and it continues to get more complex.

Until then, the public hopes the 2017 budget will be looking to address some of these issues. There is hope that they will address and modify the Home Buyers’ Plan, but it is not likely that they will address the affordability of homes for first-time homebuyers.

If you require any real estate assistance, please contact one of our Toronto Real Estate Lawyers today, or give us a call at 416-449-1400.

“This article is intended to inform and entertain. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.”