GTA will face tough housing decisions amid intensification
Demand for new condos by consumers and residential land investments by developers both are at near record-high levels.

TheStar.com
Sept. 2, 2017
George Carras

If you’re in the market for a new home and think you’ll get a better deal if you just wait for prices to come down, you may want to think again.

Demand for new condominiums by consumers and residential land investments by developers both are at near record-high levels, as evidenced in recent second-quarter GTA market reports from the Altus Group.

New condo sales in the first half of 2017 reached 22,729 units, up 103 per cent from the 10-year average. Prices increased to $742 per square foot, up 26 per cent from last year.

While the average price of resale detached homes grew by 7.8 per cent in June, according to the Toronto Real Estate Board, the average price of new detached homes increased by more than 9 per cent in June, to more than $1.7 million, Altus Group reports.

Meanwhile, property investment activity in the GTA reached a record high of $6 billion in the second quarter of 2017, with residential land making the greatest contribution to total investment levels, at 25 per cent. But what is residential land in an intensifying region? The most notable transaction was a developer’s $220-million purchase of the Country Club, a 117-hectare golf course in Vaughan.

The flow of new homes into the market has a major impact on housing stocks over time, and those seeking to understand the resale market must also understand the new-home market. Short-term real estate market behaviour can best be assessed with the benefit of long-range perspective.

The GTA is expected to grow by 2.9 million people over the next 25 years. That population increase will require a substantial amount of housing, which will in turn require an unprecedented level of collaboration between government, industry and consumers in pursuing sustainable intensification.

But GTA municipalities and communities are facing growing conflicts arising from intensification, and these conflicts are likely to increase as the development process grows more complex amid expanding policy solutions that at times can seem unaligned.

Municipalities are facing tough decisions — such as whether to convert golf course lands into badly needed housing, or preserve a community’s recreational space. Should the leisure wants of a few outweigh the housing needs of the many?

It’s bound to be a big debate and best described by former Burlington mayor and Metrolinx chair Rob MacIsaac, who once said: “The only thing people hate more than urban sprawl is intensification.”