Concerted efforts beginning to address housing challenges

Since the spring of 2020, The PMA Brethour Co., in partnership with CIBC, has been hosting a monthly industry wide webinar series focussed on issues in housing and the development industry. The PMA | CIBC Summit Series brings to light the dynamics behind the headlines with a wide range of sought-after speakers and panelists from leading place-makers and city builders across Canada. We recently had a conversation with representatives from some of Toronto’s top developers to discuss the current market, especially related to highrise residential homebuilding.

The resurgence of highrise

In January 2022, industry data (per RealNet) reported a 232-per-cent year-over-year increase in preconstruction highrise sales, and 87.8 per cent in February 2022. This can be substantiated easily by the numerous cranes that surround the city and the saturation of billboards and signage directing buyers to presentation centres or online registration. It can be said that it is difficult to drive along a large stretch of road without coming by some type of pre-construction sale.

The highrise market has “blown-up” over the past few months, with sales of projects being sold out within hours or days of launching. Unprecedented sales prices have been achieved with common incentives being provided by other builders. At the rate projects are being sold out, there clearly is a higher demand than supply available. Buyers are purchasing new condominiums, fully aware occupancy can be up to three to four years from today – and that does not seem to be a concern. What appears to be the bigger issue is the ability to purchase their home before the projects sell out.

The highrise target market is fully inclusive of all demographic age groups; from young professionals leaving home, to families or buyers who are empty-nesters right-sizing after selling their large family home. Pricing is fully dependent on the location of the building, size, amenities and extras, such as parking spaces and storage lockers. Builders have been versatile in their designs to incorporate various model suites to include not only condominiums but townhome and loft options for those who are interested, in larger units. More and more the suites are designed to include dedicated ensuite work-from-home areas, and spaces of separation within the home.

So, what happens next?

The recent federal budget announced a housing budget of $10 billion over five years, on an affordable housing program, including $4 billion over five years to launch a Housing Accelerator Fund, and a one-time $500 payment to people struggling with housing affordability. These are the steps the federal government has made to attempt to manage the current supply crisis faced by the country.

With a shortage of land available, an increase in taxes and fees, increasing interest rates, inflation and restrictions and obstacles, affordability remains to be a challenge for many, and we are now hearing questions on the depth and impact that these measures will make.

Builders agree that land is scarce, but that is one of many issues they face alongside buyers. As noted by Kash Pashootan, founder and CEO of Emblem Developments, “this is only one piece of the equation. We cannot look at just one component in isolation without considering the other pieces, such as policy and transparency... the whole entire process needs to be examined.” It goes without saying that processes at all levels of government, especially at the local levels, need to be streamlined, and more forward thinking in order for increased housing supply to become a reality.

There are projects being built and buyers taking possession daily. Buying a home is one of, if not, the largest purchase a person makes in their lifetime, and we believe that it should be one of excitement and anticipation. The industry is coming together more and more and engaging all levels of government to deliver on homebuyers needs and expectations.