Supply shortage needs more than ‘Band-aid policies’

Create stronger policy at all levels of government, Toronto board says

Real estate groups are calling on government to take stronger measures to address supply shortages to help take the wind out of red-hot prices that are keeping many out of the market and could hurt the economy in the longer term.

The Toronto Regional Real Estate Board said Tuesday, echoing comments by its Vancouver counterpart, the lack of housing supply has reached a critical juncture, adding that “Band-aid policies to artificially suppress demand have not been effective.”

TRREB called on all three levels of government to create stronger policies to address a shortage of new housing supply.

“This is not an issue that can be solved by one level of government alone,” said Kevin Crigger, TRREB’S president. “There needs to be collaboration federally, provincially, and locally on a solution.”

Home prices continued to climb in the hot Toronto area residential real estate market in September, hitting the third-highest mark on record for the month, according to TRREB data released Tuesday.

The average Toronto-area selling price for all home types combined was up by 18.3 per cent year-over-year to $1,136,280.

Scarcity of supply continues to put upward pressure on home prices in Vancouver as well, data published this week by the Real Estate Board of Greater Vancouver show.

The Vancouver board also called on the newly re-elected Liberal government to address the issue.

“The total inventory of homes for sale remains insufficient to meet the demand in today’s market. This scarcity limits peoples’ purchasing options and ultimately adds upward pressure on home prices,” said REBGV economist Keith Stewart.

“With the federal election now behind us, we hope to see governments at all levels work with the construction industry to streamline the creation of a more abundant and diverse supply of housing options.”

The average selling price in the Greater Toronto Area was up both month-overmonth and year-over-year, though the number of sales was down 18 per cent from September 2020’s record result.

Greater Toronto Area realtors reported 9,046 sales as market conditions tightened, with a significantly lower number of listings — down 34 per cent from the same time last year — and sales representing a substantially higher share of listings.

The period included a resurgence in the condo market, which contributed to sales representing a greater share of listings, TRREB said.

“Demand has remained incredibly robust throughout September with many qualified buyers who would buy a home tomorrow provided they could find a suitable property,” TRREB said. “With new listings in September down by one third compared to last year, purchasing a home for many is easier said than done.”

The Multiple Listing Service (MLS) composite benchmark price for residential properties in Metro Vancouver is $1,186,100, a 13.8 per cent increase over September of 2020 and a 0.8 per cent increase over August of this year.

The Vancouver board noted that analysts expect downward pressure on home prices only once the ratio of sales to active listings falls below 12 per cent for a sustained period.

In September, the overall sales-to-active-listings ratio for all property types in the market was 34.1 per cent, with detached homes at 25.5 per cent, townhomes at 53.1 per cent, and apartments at 36.7 per cent.