What you should know about the ever-changing GTA new condo market

Have you checked out the pricing for new condominiums lately? Well, pricing continues to rise at an unprecedented pace. According to recent data published by the Altus Group, the benchmark price for new condominium apartments was $1.17 million in February 2022, which is a 13-per-cent increase over the last 12 months. Construction costs, higher government fees, higher interest rates and labour shortages continue to drive up pricing.

Demand continues to be strong across the board, especially for very tiny units. Despite what the sales numbers say, housing advocates continue to push for more family-sized units.

Zoning challenges

Stephen Job of Tenblock Developments appeared on the Toronto Under Construction podcast recently and mentioned that he expects that more family-sized units are coming to market, mostly in expensive boutique buildings. He blames zoning as the main reason we are not seeing more large units. Eliminating single-family zoning could produce more large product, according to Job. “This represents one of the possibilities of what could happen if the policy stranglehold on the neighbourhoods are slowly and reasonably relaxed.”

Job also believes that the official plan was built around keeping the neighbourhoods exactly the way they are. He mentions that there have been a few small changes to allow for laneway housing and garden suites, but that fundamentally we have a city starving for housing supply and most of the land area around the city cannot be touched.

Skyrocketing demand

The population is shrinking in some communities in Toronto, concentrating construction and intensification in the small growth centres. “The city has essentially cast our neighbourhoods in amber, so it can’t change. I just think this is a problem, at a time when we need more housing supply,” he says.

For the average prospective homebuyer, it is difficult to assess what all of this means, but one thing is for certain, larger units in boutique midrise buildings will continue to be in short supply. With many Baby Boomers at the age that they want to move to a maintenance free lifestyle and single-floor living in a nearby condo, demand for this product type is likely to skyrocket.

However, don’t expect a plethora of new midrise projects, due to high costs, government fees, community pushback and lack of available sites for this type of housing form. According to Job, “We have a clear problem with supply, and the official plan doesn’t allow for housing to be created in Toronto, except in the most intense forms.”

Pulled back and dumbed down

There is no opportunity for newcomers to Toronto to enjoy the neighbourhoods. “The gap is now unattainable,” adds Job. “Unless you earn an extraordinary income, you cannot buy into a neighbourhood anymore. And that’s a problem, and the land use policy is the cause.”

The bottom line is that big changes to zoning and project approvals were promised by the current provincial government, but those proposed measures were pulled back and dumbed down due to municipal pushback and NIMBY outcries. What this means for prospective end-users is that things are going to continue to be expensive in the short term, and without the political will and engagement by young Ontarians, this will not change. Do a lot of your own research, hire an experienced agent, and good luck.