Durham Region Real Estate November 2022.
Last year the talk around water coolers, hockey rinks, and bars in Ontario was about how we could find out way out of the Real Estate crisis we found ourselves in. Jump to November/22 and guess what? The market has shifted, and we are still in a Real Estate Crisis.
Real Estate is as complex or as simple as you want to view it, but the foundation of the market is based on the law of “supply and demand.” Over the past few years we have seen demand high and supply low, which resulted in values increasing, crazy bidding contests, and a very unbalanced market. Why all of a sudden did we notice we had a problem? Let’s look back in time and see what caused this crisis.
First, on the supply side, we do not have enough homes to meet the demand of Buyers. This is not my opinion, but a fact based on the report that in order for Ontario to have the same number of homes per resident as the other G7 countries, (United States, Germany, France, Italy, Japan, and the United Kingdom) we would have to build 1,200,000 units. This has been a known issue for decades. There were more newly built homes built, year by year in the 1970s than there are today.
Secondly, on the demand side, Canada is ahead of schedule to bring in 460,000 immigrants in 2022. The Federal Government has stated that they want to see immigration levels over 500,000 per year over the next 5 years. The reality is, the Greater Toronto Area receives over half of the immigration population, meaning, in the next 5 years we can expect over 1,000,000 people to move to our area, all looking to be housed.
The challenge is real and even with bank rates inching upwards, the result will be too many Buyers chasing too few homes. Like inflation, when you have too many dollars chasing too few goods, prices rise, and inflation spikes. Unless there is a structural change, expect bidding wars back on the table in the near future.
Tools from the Ontario Affordability Housing Task Force
The Provincial Government commissioned a report called the “Ontario Affordability Housing Task Force” looking for a way forward to deal with the crisis. I am fortunate to be friends with one of the 9 people who created the report and legislation is being now passed following some of the suggested tools. I will list a few that are coming to a neighbourhood near you:
• Allowing the construction of up to 3 residential units on any residentially zoned property. This will allow 2 units to a single-family dwelling, add a 3rd unit to a duplex, or the addition of a laneway home or “granny flat.” The units will need to meet existing by-laws.
• Continuing with the allowing of three units, allowing them to be constructed with no development charges. (In Oshawa, if a home is demolished and a three-unit dwelling built, currently the development charges would be around $100,000. In the report it is shared that the average home in Ontario can have Governmental charges and fees totally $200,000)
• Streamlining the application process for additional units and single-family homes. This is key as it can take up to 2 years from a property severance to a building permit being issued.
• Streamlining the application process, restricting some applications to a single municipality, rather than multiple layers of bureaucracy. (As in one application bouncing between the City, Region and Province.)
• Lessening the control from Conservation Authorities. Currently, if a Conservation Authority objects to an application, the application is denied. There is no appeal or process to request a workaround.
The proposals come with some rough edges, which I am certain will be worked out as the process unfolds however it is a good starting point. One area of concern that is causing some worry is the limiting of Conservation Authority involvement. I firmly believe we need the input from Conservation to properly assess building applications, however, by way of input, not a barrier.
The other are that I see as a benefit is the limiting of public consultations. One of the items dealt with in the Task Force Report, is how NIMBY’ism (Not In My Back Yard) can slow the development process down or have applications canceled. I have seen individuals appeal developments, only to have the project approved after 12-18 months. These delays end up costing the developer, costs that once the homes are sold, adds to what a Buyer pays when they purchase the home.
I feel that this legislation is a positive step forward, it protects farmland, encouraging inner-city development on lands inside cities and towns. It is a win-win for everyone and will allow the homes and rental units to be constructed for the Buyers we know are out there and will make Durham Region their home.
I am ending with a quote from Ene Underwood, the CEO of Habitat for Humanity, GTA, one of the members of the Task Force the Province is using to create positive changes.
“My colleague, Joshua Bénard (VP, Real Estate Development), and I appreciated the opportunity to spend time yesterday with Premier Ford, Minister Clark, and Associate Minister Parsa, discussing the proposed “More Homes Built Faster” legislation.
We at Habitat for Humanity GTA share the Government’s resolve to increase the supply of housing, reduce the cost of housing, and create affordable and attainable homeownership solutions that enable more Ontarians to realize the dream of homeownership.
If you have questions about buying or selling a home or how you can take advantage of the new changes with income-producing properties I can be reached at email@example.com
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