As buyers continue to get priced out of the red-hot real estate market due to lack of supply, many are looking out of province to afford a home.
This is according to the Ontario Real Estate Association, which released new polling data revealing 46% of prospective buyers under the age of 45 have considered or are considering such a move. Of those under the age of 29, 11% are definitely going to buy outside of Ontario, while 22% are very likely to do so.
More than half of these aspiring buyers (56%) are pessimistic about the possibility of purchasing a home in the community they want to live in.
There is widespread support for government actions to address housing affordability. Ideas backed include stopping money laundering in the Ontario real estate market with a publicly searchable registry of who owns the properties (91%); introducing tax credits and incentives for homeowners to make improvements in their homes or improve energy efficiency (90%); making it easier for first-time homebuyers to get into the market by increasing first-time homebuyer tax rebates (89%); and redeveloping surplus commercial properties into housing (87%).
Toronto city council is currently reviewing a report outlining possible revenue tools, including an increase to the land transfer tax on homes valued at $2 million or more. However, in a city where homeowners already pay two land transfer taxes — one to the province and one to the municipality — any increase would only exacerbate the region’s inventory shortage issue.
The aggregate price of a home in the Greater Toronto Area increased 18.2% year-over-year to $1,035,000 in the second quarter of 2021. Broken down by housing type, the median price of a single-family detached home increased 28.2% to $1,301,000, while the median price of a condominium increased 8.6% to $630,000 during the same period.
In Toronto-proper, the aggregate price of a home increased 8.3% year-over-year to $1,115,000 in the second quarter of 2021. During the same period, the median price of a single-family detached home increased 14.8% to $1,550,000, while the median price of a condo increased 5.8% to $695,000.
While the pandemic has driven demand in the suburbs and rural areas, the return to normal socialization habits and students to in-person learning, the revival of the tourism and hospitality industries, and an increase in immigration will once again draw homebuyers to the downtown core.