One million new homes needed in Ontario in next 10 years to end 'cruel game of musical chairs'
Surging house prices are prompting a number of young families to drive until they qualify
With Ontario’s population growing rapidly, one policy think tank argues that Canada’s most populous province will need about one million new homes over the next 10 years. Ottawa-based Smart Prosperity Institute and Ontario Home Builder’s Association arrived at the near-million home figure after exploring how many homes and what types of homes would be needed to reach the needs of the anticipated 2.27 million more people who will reside in the province over the next 10 years, according to the Ontario Ministry of Finance.
The report determined that 910,000 homes will be needed for new families, 65,000 units will address current supply gaps in the market, and 25,000 would provide a cushion for any other unexpected additional population growth during this period. Of the 910,000 units for new households primarily for couples planning on having children, the report projects that 195,000 will reside in high-rise apartments and the remaining 715,000 will live in all other forms of housing.
“The goal of building one million new homes in the next 10 years presents a challenge for Ontario,” said Mike Moffatt, the senior director of policy and innovation at Smart Prosperity Institute. “However, the prize is substantial: ensuring an adequate supply of high-quality available and attainable housing, while at the same time driving economic prosperity and enabling climate action. Failure to do so will make it impossible for Ontario to attract and retain the talent it needs to compete in the global economy.”
Supply crunches in the Greater Toronto Area (GTA) put severe upward pressures on house prices, fuelling an 18.3 per cent year-over-year boost in average selling prices in September real estate data. The average cost of a home now rests at $1,136,280, according to data from the Toronto Regional Real Estate Board (TRREB) released Tuesday. The board called on the governments of all levels to address this housing supply issue, which they argue stands at a ‘critical juncture’.
Late last month, a report by RBC Economics found that while there has never been more housing units under construction in Canada over the past 12 months, these gains were notably absent in places like Toronto. The city’s housing starts rose by only 1.4 per cent (or 500 units) compared to the 2015 to 2019 average. This falls short of the national housing building growth of 26 per cent compared to the pace established between 2015 and 2019.
Surging house prices are prompting a number of young families to drive until they qualify, the report found. Between July 2019 and July 2020, 60,000 people left the City of Toronto and Peel Region for other parts of the provinces.
“Ontario’s housing market is a bit like a cruel game of musical chairs where more and more people, and in particular young families looking for room to grow, are leaving more expensive cities and scattering across the province in search of housing,” said Mike Collins-Williams, chief executive officer of the West End Home Builders’ Association. “We need more housing supply and choice in communities across Ontario. The one million new homes that are needed over the next decade to respond and support young families can only happen if municipal councils approve the necessary mix of housing options in their communities.”
Credit: Financial Times