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Toronto's Housing Affordability Concerns

Toronto’s Housing Affordability Concerns

According to CMHC, the required income to buy the average home in the Greater Toronto Area (GTA) is currently trending about 30% above that of the average actual household income. In 2016, the GTA’s average price of a pre-construction unit of single-detached home will grow by 5.3% to $940,0001, while the average MLS® price of an existing home will increase by 4.0% to reach $636,5002. By comparison, the average condo price in 2015 was $445,400 and the average rent was $1465/month, making renting a much more affordable option than homeownership3. Despite strong growth in the supply of rental units in the region, the average vacancy rate was just 1.8% in 20154.

Since The Greenbelt Act of 2005, which enabled the creation of a Greenbelt Plan to protect about 1.8 million acres of environmentally sensitive and agricultural land5, regional urban planning has focused on land intensification. The decrease in the supply of land available for development throughout the GTA has driven up the price of developable land and forced developers to focus on building upwards. Additionally, strong population growth compounded with strong economic growth in the region has further increased the already healthy demand for housing. The decreased supply due to the Greenbelt Policy coupled with the increased
demand from strong population and economic growth has led to record price levels throughout the region.

2 MLS®
3 RealNet and CMHC
4 Urbanation
5 Ontario Ministry of Municipal Affairs and Housing