GTA keeps growing, but housing supply is dwindling
More than 35 million people now call Canada home, data released by Statistics Canada last week suggests. That’s 5-per-cent growth since 2011 — the highest rate of growth among G7 countries.
About two-thirds of our population increase was from immigration, Statistics Canada says. Many newcomers settle in the GTA, which sees a net migration of 100,000 people each and every year.
None of the census data is surprising. A lot of the overall growth in the GTA was outside of Toronto in surrounding municipalities such as Brampton, Milton and Bradford West Gwillimbury.
Toronto itself also saw significant growth, especially downtown near the lakeshore between the Don and Humber Rivers, and along the Yonge subway corridor. These are areas that have seen significant condominium construction in the last decade as our industry complies with the province’s intensification policy.
The development and homebuilding industry is highly regulated; we don’t just build what and where we want to. Rather, the policies and plans of multiple levels of government determine how land gets used and where and how development occurs.
The province’s Growth Plan for the Greater Golden Horseshoe, released in 2006, was designed to move away from the suburban-oriented devel- opment pattern that we had been following to more intensive urban development. The plan mandates development be denser and use less land. BILD members have become very good at implementing the Growth Plan and have moved from building mainly lowrise homes, such as single-family detached, semi-detached and townhouses, to building at least as many highrise homes.
In 2002, the biggest year ever for new home sales in the GTA, there were 53,660 homes sold, of which 72 per cent were lowrise and 28 per cent were highrise.
Last year, there were 47,161 new homes sold in the GTA: 62 per cent of them were highrise units and 38 per cent were lowrise homes, according to Altus Group. In fact, 2016 was a record-breaking year, and the 29,186 condo units sold across the GTA were a record for sales — 30 per cent more than in 2015.
While a lot of the new condo sales were in downtown Toronto, there were also many sold in developments outside of the core. For instance, there were 2,324 new condo units sold in Vaughan last year, according to BILD member Ur- banation Inc.
Yet, the number of new condos available for sale across the GTA is at a 10-year low. Based on the current pace of sales, there is only about 4.4 months of condo unit supply, well below the 10 months needed for a balanced market, according to Urbanation, which has been tracking the highrise market since 1981.
Prices for new highrise homes also reached record levels in 2016, averaging $507,128, while average condo suite sizes grew to 826 square feet and the average price per square foot increased to $614. A year ago, the average price per square foot was $584 while the size of an average suite was 775 square feet.
The lack of supply will lead to a slowdown in sales and Urbanation is predicting only 23,000 new condo unit sales in 2017. That is not nearly enough to meet demand as the region continues to grow. Bryan Tuckey is president and CEO of the Building Industry and Land Development Association (BILD) and is a land-use planner who has worked for municipal, regional and provincial governments. Find him at twitter.com/ bildgta, facebook.com/bildgta and bildblogs.ca.