From the Toronto Star, June 7, 2014: “Sales in the GTA soar to over 11,000 – an 11.4 per cent rise in sales over the previous year…average sale prices rose by over 11.8 per cent, with average selling price of $585,204.”
As I asked in a recent article, where’s the bubble?” Here we are halfway through the year and all the pundits predicted almost the opposite would happen in the market. Where are they now? Hiding behind their laptops, I presume.
But I find recent stats, not only here in Toronto but elsewhere across Canada, reveal the same reality: there’s a lack of affordable housing.
For those starting out in life and in business, there is a very limited number of housing options:
a) Rely on parents/grandparents to fund a mortgage for them;
b) Keep living at home and put their hopes of independent living and possibly starting a family on hold;
c) Rent an apartment until they have enough saved to buy either a condo apartment or a small home outside of a large city or town and face a commute.
Many of our young people have huge student loans to contend with after graduation. What are their chances of home ownership with those loans looming over their heads for several years, even if interest rates continue to remain low? Students are returning home to live with parents after graduation more and more often, as I have personally experienced.
Another fly in the ointment is the recent decision by CMHC to increase the requirements for obtaining a high-ratio mortgage.
It seems the roadblocks for owning a home are mounting every year, yet in spite of these facts and other speed bumps, the housing market continues to roll along at a remarkable growth rate across our nation.
All levels of government must ramp up their individual efforts to provide affordable housing for our future generations. What most of us have seen over the years is pathetic. There’s so much land in every community that could be reasonably developed to assist our youngsters in what should be everyone’s right to a decent living space.
Sure, there’s a niche in building rental units, but that’s no answer to one’s desire to own their own home. A Band-Aid approach will appease the desire for decent accommodations for those starting out in life.
Builders across this country have a lot of problems with local municipalities, because the development fees are over the top. As a result we have towering monster condo buildings or stacked townhomes to fulfill the demand for housing.
I am not suggesting here, my fellow agents, that we stop building all of these kinds of units. They’re a viable choice for those wishing to live and work in the downtown areas of cities and it makes sense to builders and developers to maximize the land usage, as we know land is non-renewable.
But what about some cities and small towns whose downtowns have been decimated by urban sprawl and large box stores and malls? I think that a market niche is available, as seen recently in a CBS documentary, where an entrepreneur/developer has taken over vacated properties in New York and converted them to affordable housing. It’s working in other cities as well.
So, here’s the challenge: become involved in working to get affordable housing in your local communities. Reach out to your local councils and provincial and federal representatives. Get them interested and involved in the issue.
It may be a start to a solution to what I see as a housing crisis for the next generation of home buyers.
Until next month, see you online at stanthecoach.com.
Stan Albert, broker/manager, ABR, ASA at Re/Max Crossroads’ iRealty office in Toronto can be reached for consultation at [email protected]. Stan is now celebrating his 44th year as an active real estate professional.