TORONTO - The Toronto Regional Real Estate Board issued a call to action Thursday over housing supply and transit as a new report projects increased demand for both amid a growing population.
Housing sales are expected to climb 10 per cent this year to about 97,000 home sales, the board said in a forecast out Thursday, up from the 87,825 sales last year.
The average sale price is also expected to climb about 10 per cent this year to $900,000, up from $819,319 last year to put further strain on affordability.
The crunch comes as population of the Greater Toronto Area continues to see huge growth that is putting a strain on both housing supply and transit infrastructure, requiring bold steps now before solutions become more costly, said TRREB CEO John DiMichele.
"Waiting is very, very expensive, and no longer an option," he said at the board's annual outlook launch on Thursday.
"These problems are very real and evident. We need to plan and start implementing solutions right now."
January's home sales data showed that last year's price and sale gains continued into the new year.
The month saw 4,581 home sales in the month, up 15.4 per cent from the same month last year. The average sale price of $839,363 was up 12.3 per cent compared with a year earlier. The benchmark price rose 8.7 per cent for the high gains since October 2017, said TRREB.
The climb in January followed a trend in the latter half of last year that saw home sales begin to rebound as mortgage rates trended lower and people adjusted buying plans to the mortgage stress test put in place at the start of 2018 and other policy changes.
"After more than three years of slower market activity brought on largely by changes in housing-related policies at the provincial and federal levels, home sales will move closer to the demographic potential in 2020," said Jason Mercer, TRREB chief market analyst in a statement.
Mortgage rates did start to track up towards the end of the year, but have declined since late December when news of the coronavirus outbreak came out. TD Bank lowered its posted mortgage from 5.34 per cent to 4.99 per cent on Wednesday to better reflect market conditions, it said.
The board said both price and sales growth are likely to be concentrated in the semi-detached, townhouse and condo markets that are somewhat more affordable, but that the average price could rise further if detached home prices see a similar pace to other home types.
It says that according to an online survey by Ipsos, more than half of buyers claim to have been affected by the mortgage stress test, pushing them to change expectations on home price, type or location, as well as to look to alternate lenders.
The survey of 4,333 people found that while detached homes remain the most popular intended type of home to purchase at 42 per cent, it has dropped from 54 per cent when the survey was first conducted in 2015.
Results from the survey, conducted last November, indicated that a similar number of people were either likely or very likely to buy a home was similar to a year earlier. A separate online survey conducted by Altus Group and released last week found that 12 per cent planned to buy a home this year, down from 21 per cent for the same survey last year.
According to the polling industry’s generally accepted standards, online surveys cannot be assigned a margin of error because they do not randomly sample the population.
This report by The Canadian Press was first published Feb. 6, 2020.