5 reasons to be optimistic about the GTA housing market

It’s been a rather interesting year – the last few years, in fact – for housing in Ontario. Climbing out of the pandemic, wrestling inflation, managing interest rates, making sense of the political climate and navigating the economy… there’s been no shortage of challenges.

There still are, in fact. But… there are reasons to be optimistic.

Immigration

Canada’s immigration goals have been well documented, and the number of newcomers to Ontario – increasingly so each year – well publicized. While on the surface this exacerbates the housing supply crunch, longer-term, it’s actually a positive sign.

“Mostly thanks to immigration, Canada is the fastest-growing country in the G7 and among the 20 fastest-growing countries in the world,” says Dave Wilkes, president and CEO of the Building Industry and Land Development Association. “These are reasons to celebrate, given our aging population and declining birth rates. New Canadians help make our economy more competitive and our society more dynamic. But there is no denying that welcoming 1.5 million newcomers by 2025 will present a housing challenge. Canada has the lowest number of housing units per 1,000 residents of any G7 country. Major markets, such as the GTA, have been undersupplied for decades.”

Translation: To find homes for these new Canadians and otherwise address the supply and affordability challenges, housing is not just an election issue at the national, provincial and municipal levels, it is a permanent agenda item. Governments are on it.

Missing middle and infill housing

This brings us to the next point – modifying housing policy to facilitate as much homebuilding as possible.

“Do we further intensify in our cities with infill, midrise and highrise housing,” says Wilkes, “or do we expand municipal borders to add more land so we can build more single-family homes? How do we encourage more rental housing to be built? Is there enough land? Do we need to redevelop every unused strip mall, parking lot and car dealership in the city?”

The short answer to all of these questions, experts agree, is absolutely yes.

“Leaders of all political parties and at all levels of government have acknowledged housing supply and affordability is a problem and are taking action to move the needle,” Richard Lyall, president of the Residential Construction Council of Ontario (RESON), told Builders’ Annual.

To spur more housing production, there must be more densification allowed in our cities, especially around transit hubs. We also need as-of-right zoning along avenues and major streets served by mass transit and connecting hubs, he says.

To its credit, the City of Toronto recently adopted a new policy allowing as-of-right permissions for single-family homes to be converted into duplexes, triplexes and fourplexes in all lowrise residential areas.

Master-planned communities

Be they in the five Urban Growth Centres in the GTA – Downtown/Waterfront, Scarborough Centre, North York Centre, Etobicoke Centre and Yonge-Eglinton Centre – in the other 20 in the province or elsewhere in Ontario, master-planned developments are becoming more important.

Master-planned communities (see our next point on 15-minute neighbourhoods), essentially are live-work-play developments that offer a variety of housing options and amenities, to promote quality of life.

Several are already under construction in the GTA:

• Lakeview Village, a transformative 177-acre mixed-use waterfront community along the waterfront in the Port Credit area of Mississauga, involving different housing types and several builders, such as Tridel and Branthaven.
• Brightwater, a similarly transformative 72-acre master-planned community a little further west along the Port Credit waterfront, also with numerous developers and types of homes.
• Arcadia District, a multi-tower condo development from EllisDon Developments at Bloor and Kipling in Etobicoke.
• Central Park, a master-planned, mixed-use condominium community located in the prestigious Bayview Village neighbourhood, from Amexon Development Corp.

And these are just a few, to say nothing of other noteworthy developments, such as National Homes’ mixed-use condo near Burlington’s waterfront, Northshore; or Ballantry Homes’ The Villages of Oak Park in Oakville; and countless others.

“Large scale developments are important in creating complete communities, and very helpful in having the scale a developer needs to add key amenities, such as a grocery store, daycare, small scale at-grade retail, parks and open spaces, as well as other uses such as office, hotel and multiple tenures,” says Ben Myers, president of Bullpen Research & Consulting, Toronto. “These projects may not significantly improve affordability, but they do improve the quality of life by creating everything a resident might need within walking distance, saving money on transit, travel and shopping.

15-minute cities

Forget the conspiracy theories: 15-minute cities or neighbourhoods are not any government’s way to control citizens and financially penalize them for venturing outside of such boundaries. It’s an urban planning concept that puts daily necessities within a 15-minute walk, bicycle or transit ride from home.

Indeed, a recent report from ReMax Canada highlights the concept as an answer to supply of housing for the greatest number of Canadians, in a way that delivers maximum livability and affordability – particularly in smaller municipalities that are experiencing rapid growth.

The report, 15-Minute Neighbourhoods: Lessons for Small Communities, offers suggestions such as:

Diversity within densification: Considering how we can create a variety of types of homes and sizes within each neighbourhood (high-, midrise, semi-detached and the missing middle).

Transform empty spaces into productive, residential communities: Empty commercial and retail spaces and parking lots can be transformed into residential dwellings, in collaboration with area experts.

Balance in transportation: Design cities to encourage the use of various modes of transportation, by accounting for bike lanes on all major streets; implementing fast and accessible public transportation; and building walking paths/sidewalks throughout neighbourhoods.

Offering a mix of housing: For cities to avoid falling into the trap of gentrification and ensure equitable housing, neighbourhoods should comprise a balance between market housing, subsidized housing, mixed-income housing and co-ops.

Take a long-term view

There is plenty of evidence in this issue of the Builders’ Annual, in sister publications Condo Life and HOMES, and elsewhere in the media that the GTA housing market is, let’s say, underperforming.

“The GTA real estate market continues to experience the effects of higher borrowing costs, increasing inflation and economic uncertainty,” says Paul Baron, president of the Toronto Regional Real Estate Board (TRREB). “All of these factors have contributed to slower economic growth and impacted home sales.”

But when you buy a home, experts advise that you should be looking five to seven years – especially during challenging times – before you begin to assess how well your investment might be doing.

And by that measure, the view is very different.

“Inflation is going to get under control in the next couple of years and interest rates are going to decline,” adds Myers. “Demand for housing will continue to outpace supply, and pricing will trend up over the long-term. Therefore, if a buyer has confidence in their economic prospects moving forward and intends to hold the property they are buying for five or more years, there will continue to be attractive buying opportunities over the next 18 months.”

For more homebuying advice from our expert contributors, check out our 2023 Builders' Annual.