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Threat of condo cancellations looms over pricey Toronto housing market

Since the start of last year, 17 projects have been cancelled in the GTA, according to real estate services firm Altus Group Ltd.

A parcel of land at the corner of Maplecrete Rd. and Highway 7 sits vacant. Liberty Development Corp. pulled the plug on a three-tower, sold-out condo development, citing problems with construction financing.

Builders in Toronto’s frenzied condo market are walking away from giant towers they have pre-sold, reflecting a rougher road to profits — and leaving buyers in the lurch.

Soaring construction costs and condo values in Canada’s largest city, where prices have surged amid a booming economy and strong immigration, have spurred developers to cancel projects they started when construction was cheaper and pre-sales were less lucrative. Condo prices have increased about 20 per cent since February of last year, according to the Canadian Real Estate Association.

“Many projects launched for pre-sales prior to having their proper approvals in place,” said Shaun Hildebrand, a senior vice-president at Urbanation Inc. “By rushing to bring units into a hot market, some projects jumped the gun and added risk to the development.”

According to Urbanation, which studies the Toronto condo market, there are 10,622 condo units in the Greater Toronto Area that were offered for pre-sale before 2017 and still await construction. Since the start of last year, 17 projects, with 3,627 units, have been cancelled in the region, according to real estate services firm Altus Group Ltd. That’s up from seven projects, with 808 units in 2016.

This month alone, Liberty Development Corp. pulled the plug on a three-tower, sold-out condo development, citing problems with construction financing. Liberty didn’t respond to an email seeking comment.

Bad timing

The threat of still more cancellations looms over Toronto, where housing is tight and expensive as it is. While the average price of a home was down 17 per cent in March from a year earlier, according to the Toronto Real Estate Board, the decline comes after a long run-up. To cool the market, the government added rules making it more expensive to borrow — pushing buyers into condos from even pricier single-family homes.

Typically, developers need pre-sales of at least 70 per cent to get financing to move a project forward, said Phong Ngo, director of data solutions at Altus. That isn’t their last hurdle. From there, the longer it takes to break ground, the higher the costs of materials and labour, especially as interest rates rise. Builders may face delays in getting government permits, finding contractors and workers amid the hot demand or parrying special-interest groups that oppose construction.

As of February, 143 condo projects that are at least 70 per cent pre-sold hadn’t started construction yet, according to data from Altus. Of these, 43 had hit the 70-per-cent mark more than a year earlier.

Construction costs in the Toronto area, which typically have risen in tandem with inflation, increased 6 to 8 per cent last year (compared with inflation of about 2 per cent), according to Altus. “We believe that going forward next year, it’ll be at least that or more,” David Schoonjans, senior director at the firm, said. At the same time, labour costs are rising, with hourly compensation up 2.4 per cent across Canada in 2017.

“At some point, the project stops making financial sense,” Schoonjans said.

It is in that environment that the Toronto region finds itself with 412 condo projects totalling 101,208 units in the works, Altus reports.

The rebound

In the end, “only a small portion” of condo buildings will be cancelled, said Lauren White, senior vice-president of the Land Services Group at CBRE Group Inc. “Therefore, the effect will be a minor tightening on supply as purchasers from cancelled projects move to active projects.”

Homebuyers who have had their projects scrapped will be back in the market again, increasing demand even further, said Mike Czestochowski, executive vice-president of the group.

That’s good for builders but a problem for buyers. Many who get their deposits back from the developer of a nixed project probably will have lost equity, because the market is a lot hotter today, Czestochowski said.

With the intense demand for housing in and around the city, many new projects are bound to rise and cancelled ones to be revived — at higher prices.

“We haven’t seen an increase in supply yet,” he said. “It would be hard to imagine what else they do with the site.”

Source :

Toronto Star

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Toronto condo rents climb 11% in past year as new mortgage rules lock out buyers

Research firm calculates that standard buyer better off renting as ownership costs have surged

The average cost to rent a condominium in the Greater Toronto Area has risen by almost 11 per cent in the past year partly because tougher mortgage rules have shut out new buyers and flooded the market with renters, a new report by research firm Urbanation says.

Urbanation calculates that the average monthly rent of a condo in the GTA has risen by $214 in the past year and is now at $2,206. In the city proper, the average rent is even higher — $2,432.

  • Why it may be a gamble to buy a Toronto-area condo as a rental investment

“Renters have started to gravitate toward less expensive options in the rental market, as evidenced by an increased share of leases for studio and one-bedroom-without-den units, which averaged rents of $1,640 and $1,907, respectively,” the report said.

A major factor in the rent surge is people being shut out from being able to buy. In January, new rules were implemented that make it much harder to get a mortgage. And the impact on Toronto’s condo market has been significant, and immediate.

  • No fixed address: What’s causing soaring prices in Toronto’s condo rental market

“Renters in the GTA are facing very strong market forces that are pushing hard on demand while new supply remains stubbornly low,’ Urbanation’s senior vice president Shaun Hildebrand said.

Based on the most up-to-date data, Urbanation calculated that an “average” 714-square-foot condo in the GTA would cost $558,000 in the first quarter of 2018,

A year earlier, a buyer would have needed an income of $77,000 to purchase that average condo, based on mortgage rules at the time, and assuming the buyer could come up with a 20 per cent down payment.

  • Will 2018 crush Toronto renters’ dreams?

Today, with higher prices and tougher rules, one would need more than $100,000 in annual income to buy the same condo.

While Urbanation’s data is bad news for renters, there is a silver lining in the numbers. Based on the company’s calculations, it’s a much better financial move to rent than to buy at the moment.

That’s because based on current mortgage rates and assuming the buyer can come up with 20 per cent down up front, that same average condo would cost  $170 more every month in ownership costs that it would be able to generate in rental income.

  • New Ontario rent control rules may prompt some condo owners to sell: report

So a standard buyer on that theoretical condo would be under water every month, and banking solely on making up for it by selling for a higher price down the line.

 

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The risks of becoming a Google city

The rush to become a tech hub raises questions about Toronto’s independence and just who will control the city’s valuable Port Lands.

Sidewalk Toronto is a joint effort by Waterfront Toronto and Alphabet’s Sidewalk Labs to create a new kind of mixed-use, complete community on Toronto’s Eastern Waterfront, beginning with the creation of Quayside, a 12-acre former industrial site at Queens Quay E. and Parliament St.  (PHOTO PROVIDED BY SIDEWALK TORONTO)

Waterfront Toronto’s eagerness to sign a deal with a Google sister company has alarmed experts who warn cities are easy prey for Big Tech and its unquenchable thirst for data.

“Google isn’t going to be creating these urban innovations for the public good or the common welfare,” says Jathan Sadowski, a postdoctoral research fellow in Smart Cities at the University of Sydney in Australia.

“They’ll be doing things — as we should expect them to — that will benefit their own interests as a private company, as one of the most profitable, most wealthy companies in the world.

“The Google-Toronto partnership is a really high-profile thing and it’s likely to set the terms and conditions for how these partnerships happen in other places around the world. Companies are carving out portions of cities as their own kind of sovereign territories.”

Toronto’s emergence as a global tech hub was cemented last fall with news that Sidewalk Labs, the urban innovation firm of Google parent Alphabet Inc., won a competitive bid to be Waterfront Toronto’s “innovation and funding partner” for Quayside, a 12-acre former industrial site at Queens Quay E. and Parliament St.

Not mentioned at the glitzy launch was the fact that board members of Waterfront Toronto, a city, Ontario and federal partnership, had only four days to review the “framework agreement” — a deal to work with Sidewalk Labs for a year on development plans — before signing.

Julie Di Lorenzo, chair of the agency’s investment and real estate committee — responsible for reviewing and evaluating “major development projects” — voted against the framework agreement, expressing alarm at the process’ “accelerated manner,” minutes of that meeting show.

Waterfront Toronto did not share agreement details with the governments that fund it before the Sidewalk Labs announcement, according to a city report that says future deals must be shared in advance for a “thorough review.” No city councillor except for Denzil Minnan-Wong, the city’s representative on the Waterfront Toronto board, has seen more than a summary — released under pressure — and he says Torontonians need to see the full agreement public.

“It’s happening very, very quickly, this deal,” Minnan-Wong, noting Sidewalk Labs makes no secret of the fact that some of its urban experiments would spill beyond Quayside into the 800-acre Port Lands owned mostly by the City of Toronto.

“How can Waterfront Toronto enter into any negotiation on something they have no claim to, no property rights for?” The land is in the city’s ownership, and we haven’t given away claim to 800 acres that are the crown jewels of the city, arguably the most valued land in North America.

“We have to be very careful not only how we plan that community, what we use the land for, but how we can maximize the financial benefits associated with that for the city.”

Sidewalk Labs’ role in developing waterfront land, unlocked by the promise of $1.25-billion in government-funded flood protection, remains unclear as work continues on an agreement expected later this year that, if signed by both parties, would formalize the Quayside project dubbed “Sidewalk Toronto.”

Manhattan-based Sidewalk Labs says it wants to build “the first truly 21st-century city,” developing and piloting revolutionary technologies for urban living.

In a January question-and-answer session on Reddit, Sidewalk chief executive Dan Doctoroff envisioned his company as “the co-master developer with Waterfront Toronto. That role includes developing a plan and a vision that the community and its elected officials can rally around and be excited about, working to get the plan approved, and overseeing the eventual development of infrastructure” with many other companies involved.

While the land is undeniably valuable, observers say it is the promise of endless streams of datafrom custom-connected communities, with sensors monitoring and recording almost all manner of life that has Google, Microsoft and other tech giants salivating.

Sidewalk’s assurances that it envisions making money from licensing new technologies created in the high-tech district, rather than selling data, are not allaying fears.

“Data is now essentially a form of capital — it’s necessary not to just run advertising and marketing, it’s essential capital to build artificial intelligence,” says Sadowski. “Data itself is so valuable to these companies that it’s not surprising they’re going to collect as much of it as possible, and it doesn’t need to be pegged to a certain person for it to be valuable and for them to use it in a myriad of different ways.”

Cities, many of them cash-strapped and open to outsourcing powers such as traffic and zoning controls in the name of innovation, will be no match, say observers including Rana Foroohar, author of Makers and Takers: The Rise of Finance and the Fall of American Business. Amazon has cities including Toronto fighting for that tech giant’s second headquarters in an unprecedented Olympic bid-style competition.

“These firms sell themselves as innovators and job creators but they create far fewer jobs than even the previous generation of tech firms such as Microsoft or IBM,” says Foroohar, who also writes for the Financial Times. “I would argue the balance of power is very much in their favour. Public officials need to think about that when they are negotiating these deals and that’s why ownership of data, monetization of data, needs to be at the forefront.”

Sidewalk Labs hired Ann Cavoukian, the former Ontario information and privacy commissioner, as a privacy consultant. In an interview she said both the Google company and Waterfront Toronto are taking very seriously her advice to build into all their plans the need to anonymize all collected data to protect personal privacy. But who actually owns that data? “That is not my concern — I am only looking at privacy,” she said.

Doctoroff has said: “We’re not going to use data for commercial purposes. Data will be used to improve quality of life. Processes used to develop policies will be open and collaborative.”

Micah Lasher, Sidewalk Labs’ head of policy and communications, told the Star in an email “there is no data-sharing agreement between Google and Sidewalk Labs.”

Waterfront Toronto hired its own “digital governance” consultant. It says “the rights and governance related to intellectual property for Sidewalk Toronto will be defined in subsequent agreements that occur throughout the year-long joint planning process between Waterfront Toronto and Sidewalk Labs… We are already thinking together about how to implement best practices that maximize open data and that could help citizens, civic groups,and innovators bring new ideas to the district.”

Such assurances are not enough for some experts, who note Sidewalk Labs is pitching the district as a “platform” upon which many other private companies will build. If somebody visits a friend in Quayside, will they get the option of becoming invisible to all the sensors, and how would that work?

Renee Sieber, a McGill University expert on governments’ use of technology and data, says tech industry rhetoric casts cities as dumb, in need of “smart” gadgetry to make them efficient. She wants “slow” cities.

“Cities are slow for a reason, they are inefficient for a reason. Being effective is not the same thing as being efficient. If you want to help poor people, if you want to help minorities — that’s not efficient. That’s very expensive, so governments have to be there to be fair and accountable.”

Sidewalk Toronto is holding its first “public roundtable” March 20 at 6:30 p.m. at 351 King St. E., 17th floor

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HOW ARE CONDO BUYERS PROTECTED IN CASE OF OCCUPANCY DELAYS?

The main advantages of buying a pre-construction condo are that you usually get a better price when you buy at the beginning, and you get to choose to some extent the finishes that your unit will have. For some, there’s the added kick of knowing that no one else has ever lived in their home before. But if you can’t handle the fact that when you buy a pre-construction condo you will have to wait three or four years before you actually move in, you should buy something else.

How certain can you be about the time you’ll have to wait until your condo is complete, and how are you protected against delays in construction? The fact that delays happen is not exactly an industry secret, and to a certain extent, developers are in a bind themselves. George Carras, the head of one of the main real estate industry research firms, RealNet Canada, said recently that labour shortages in Toronto  are making it increasingly difficult to build the huge number of new condos on time. According to Carras, the most that builders can produce with present resources is 15,000 new units a year. But there are currently 55,000 units under construction, and 32,000 more in pre-construction.

There are plenty of other reasons for delays in condo construction—the tighter credit market available to developers, the massive size of some developments, the staging problems of building large buildings in a confined space in the downtown core—but developers are expected to deal with these problems. The best advice to anyone considering purchasing a condo is to check into the developer’s track record before you commit. A good source of information about new home warranties in general, and condominiums in particular, is Tarion.

You the condo  buyer, are quite well protected in Ontario by the Tarion warranty corporation. When you purchase a pre-construction condominium, the builder is required to attach a document called the Tarion Addendum. It contains a Statement of Critical Dates, with the date when the builder expects the condominium to be completed clearly stated. This is obviously important and is one reason many experts recommend that you have either a realtor or a lawyer with you when you sign a purchase agreement.

The Statement of Critical Dates allows the builder a fair amount of wiggle room, and every purchaser needs to be aware of this. The key date here is the Outside Occupancy Date: the builder cannot extend occupancy beyond this date without paying you compensation.

But before you reach that Outside Occupancy Date, you will go through a First Tentative Occupancy Date. As the name suggests, it could be the first of several, and it is “tentative,” representing a target date. In each case of an extended occupancy date by the builder, you must be informed in writing 90 days beforehand.

If the first (or other) tentative occupancy date can’t be met, the builder must set a Final Tentative Occupancy Date, within 30 days of the completion of the building’s roof. If that date can’t be met, the builder must give you 90 days’ written notice to set one more deadline: the Firm Occupancy Date. This is the last occupancy date the builder can set and it can’t be later than the Outside Occupancy Date you both signed off on at the beginning. If the condo isn’t ready by the Outside Occupancy Date, you have thirty days to terminate the agreement if you wish. The Outside Occupancy Date may be as late as 365 days after the Firm Occupancy Date.

A fairly high-profile legal action is now underway in the courts of British Columbia, arising, according to newspaper reports, from a condo developer’s alleged failure to inform purchasers of a delay in construction. One of those purchasers was Kim Campbell, former prime minister of Canada. She and the other purchasers in the upscale building are suing the developer, who delayed completion of the building by more than a year, without, allegedly, informing anyone. Campbell is reported to have signed the purchase agreement in October 2007, with an occupancy date of December 2011. The building was not completed until January 2013.

Builders too are protected, against delays that are considered unavoidable, such as would occur if construction workers were to go on strike, or some kind of disaster caused extensive damage. And there is also a provision that allows the builder to negotiate an extended occupancy date by mutual consent.

 

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Data Reveals Red Hot New Condominium Apartment Sales Across Canada in 2017

TORONTO, Feb. 12, 2018 (GLOBE NEWSWIRE) — Altus Group Limited (“Altus Group”) (TSX:AIF), a leading provider of commercial real estate services, software and data solutions, today released the latest numbers on new condominium apartment sales in key markets across Canada for 2017. The data provides insight into new condominium apartment sales, inventory and pricing in the Greater Toronto Area (“GTA”), other areas of the Greater Golden Horseshoe (“GGH”), Edmonton, Calgary and Vancouver.

In 2017, the GTA was by far the hottest market in the country for new condominium apartments with a record 36,429 units sold. The market saw the largest increase in buying activity across Canada with 7,297 more units sold than the previous year, up by 25%. Despite an increase in the number of new units brought to market by developers in 2017, the pace of sales exceeded the new supply. As a result, available inventory declined to its lowest level since Altus Group has been tracking the market, which prompted rapidly rising prices.

Other areas of the GGH also saw strong sales in 2017 with a combined 3,467 new condominium units sold last year, although the total was down 8% from a buoyant 2016. Hamilton and Kitchener-Waterloo remain the two largest new condominium apartment markets in the GGH regions surrounding the GTA with 783 and 1,257 units sold, respectively.

New condominium apartment sales in Edmonton grew over 60% in 2017, the largest percentage growth of the markets tracked, with 1,289 units sold last year. This significant increase was connected to the downtown condo market where the new Rogers Centre attracted buyers to the city’s core, with sales increasing by 160% year over year. The suburban areas of Edmonton were still dealing with a large supply of inventory and sales were relatively flat compared to 2016.

The recovery of new condominium apartment sales in Alberta was also seen in Calgary, which saw 2,083 new condo units sold last year, increasing by 42% from 2016. After a two-year downturn, buyers are returning to the market but unlike in Edmonton, it was the suburban areas, rather than the downtown core, that saw the stronger increases.

While other key markets in the Altus Group data saw sales in the new condo market either exceed or fall just slightly below their 2016 levels, Vancouver was an outlier last year with a marked decline in overall unit sales, impacted by the sharp drop in new condominium supply coming onto the market. However, the 10,939 units sold in 2017 represent a remarkable 90% sales rate of all new inventory introduced into the market in 2017. Vancouver is the tightest new condominium apartment market in the country and sales levels are not reflective of underlying demand, which remains very strong.

“The sales activity across the country indicates that demand for new condominium apartment product was very strong in 2017, but particularly in the GTA,” said Matthew Boukall, Senior Director at Altus Group. “While we expect to see some moderation in the GTA sales volumes in 2018 given price escalation in recent years, rising interest rates, tighter lending criteria and additional mortgage stress testing, strong demand in Vancouver and Calgary is expected to push new condominium apartment sales higher provided a broader range of affordable product can be brought to market.”

Altus Group took a deeper look into the 2017 figures to compare what buyers with a budget of CAD $500,000 could afford in the downtown areas of the various markets across Canada. Comparing the pricing of available new condominium apartment units found that consumers have considerably more buying power in smaller markets such as Calgary, Edmonton and Kitchener versus the two largest markets, Vancouver and Toronto.

  • In the GGH, a buyer could find two bedroom units over 1,000 sq.ft. near the downtown of Kitchener that could be appealing to those willing to go outside of the GTA in search of affordability.
  • Calgary and Edmonton buyers could also find two bedroom units between 850-1,000 sq.ft. in high-rise buildings in desirable areas near the core.
  • In the Toronto market, buyers would have to settle for a one-bedroom unit with only 430 sq.ft., or approximately half the space of the other markets.
  • In downtown Vancouver, we were unable to find any new condominium apartment units offered for $500,000 or less. In fact, buyers would need to go into nearby markets like Burnaby to find projects offering one bedroom units at this price point.

Source : Altus Group

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Why are central Toronto condo prices rising so fast?

Why are central Toronto condo prices rising so fast? It’s a complicated issue but here is a summary of reasons:

  • Rising immigration year to year. Currently the federal government is raising its targets by 3-6% per year; 310,000 (2018), 330,000 (2019), 340,000 (2020). In the previous decade the average was 260,000. 35% of these new immigrants end up in the GTA
  • Economic growth in Canada is now approaching 3% (GDP)
  • The unemployment rate is 5.7%, the lowest it has been in 40 years.
  • Inflation is less than 2%
  • Interest rates are still very low historically
  • Provincial and Municipal governments have meddled in the condo economy to a huge extent, contributing to a shut off of new inventory.
  • Historically low inventory of condos available to buy or rent
  • New rent controls that discourage the development of all rental housing including condos.
  • Toronto is now a world city with many international buyers and visitors eager to experience the exciting city it has become.

For all of these reasons plus a few more, it seems unlikely that prices for condos will see much relief. Bubble talk is just talk. I have heard it every year since 1998 when Toronto’s great rebuild kicked into overdrive.

Toronto Real Estate Inventory Statistics 

A stat I watch weekly is resale condo inventory for the city of Toronto (Eglinton, DVP, Dufferin, Lake Ontario). This covers what I largely consider “downtown”.

 

Below is the history of early January inventory for the past 8 years.

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This stat tends to predict what prices will do over the year. 713 units is a tiny supply for this region. I think this indicates significantly high prices for 2018. If a huge burst of supply doesn’t come we have some big long-term price issues.
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Sale Market Overview

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New CMHC core need data again shows the need for a portable housing benefit

New CMHC core need data again shows the need for a portable housing benefit

In the News …

One in Four Canadians Who Rent Have Core Housing Needs

(So, why is this ‘good’ for landlords?)

Amid the continuing onslaught by all levels of government to win votes from tenants in their bids to stay employed (and in power) at the expense of landlords, there remains one sobering and undeniable fact: nothing any level of government has done or is currently doing will reduce the housing and affordable housing crises.

Even CMHC’s $16 billion program to encourage housing initiatives is fatally flawed–it provides nothing for sustaining rental housing after the buidlings are constructed. Some municipalities in Ontario are now abandoning their self-owned and operated affordable housing initiatives. They’ve discovered that indiscriminately charging low rents amid spiralling costs is not a sustainable strategy. One municipality in particular is spending $107 of the taxpayers’ money for every $100 it collects in rent in one of its ‘affordable housing’ properties. Toronto has a $2 billion backlog of maintenance and repair issues, and will be removing a net 1,100 units from its rental inventory this year.

The Canadian Federation of Apartment Associations (CFAA) wrote that CMHC reported in November 2017 that 1 in 4 tenants (and 1 in 15 homeowners) were in core housing need. The great majority pay more than 30% of their gross household income towards rent.

Landlords can take some solace that there will continue to be for the foreseeable future a large  surplus of tenant applicants to chose from for every available rental unit. Landlords must  select tenants who are most certain to meet their rent obligations so that the landlord can in turn meet their own mortgage commitments. And rents will continue to rise as long as demand far outstrips supply … or at least until small-to-medium rental property owners are bankrupted by ‘fair’ tenant legislation.

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December 2017 Market Stats – Maziar Moini Reviews

maziar moini reviews

maziar moini reviews

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Changes to the Land Use Planning Appeal System

Ontario passed the Building Better Communities and Conserving Watersheds Act 2017, which overhauls the province’s land use planning appeals system, giving communities a stronger voice and ensuring people have access to faster, fairer and more affordable hearings.

Giving Communities a Stronger Voice 

Once in force, the act will establish the Local Planning Appeal Tribunal to replace the Ontario Municipal Board. It will amend the Planning Act to eliminate “de novo” hearings for the majority of land use planning appeals. Instead, the tribunal will function more like a true appeal body for major land use planning decisions.

The act includes the following reforms aimed at giving communities a stronger voice in local land use planning decisions:

  • Under the new standard of review for land use planning appeals involving matters like official plans and zoning bylaws, the tribunal will only be able to overturn a matter if the tribunal determines that the municipal decision is inconsistent with, or does not conform to provincial policies and municipal plans.
  • The tribunal would then be required to return the matter to the municipality with written reasons when it overturns a decision.
  • The municipality will then have 90 days to make a new decision on an application under the new law.
  • The tribunal will retain the authority to make a final decision only when, on a second appeal, the municipality’s subsequent decision still fails to follow provincial policies or municipal plans.

Under this new model, the tribunal will be required to give greater weight to the decisions of local communities, while ensuring that development occurs in a way that is good for Ontario and its future.

Faster, Fairer and More Affordable Planning Appeals

The act will introduce major changes to the way land use planning appeals are conducted to reduce the length and cost of hearings and create a more level playing field for all participants. These reforms include:

  • Requiring the tribunal hold a case management conference for major land use planning appeals to identify and narrow the scope of the appeal and to explore opportunities for mediation and settlement, which could avoid the hearing process all together.
  • Establishing clear timelines for the hearing process to help ensure timely decisions.
  • Creating statutory rules regarding the conduct of hearings, including setting strict timelines for oral hearings and limiting evidence to written materials in major land use planning appeals.
  • Eliminating lengthy and often confrontational examinations and cross-examinations of witnesses by parties and their lawyers at the oral hearings of major land use planning appeals.
  • Empowering the tribunal to examine parties and other individuals who appear before the tribunal and providing the tribunal with modern adjudicative powers to promote active adjudication, provisions for alternative hearing formats and permitting the assignment of multi-member panels.

Free Planning and Legal Support

The act will establish the free Local Planning Appeal Support Centre, a new provincial agency, which will help Ontarians access information and advice about the appeal process. The centre will be modeled on the Human Rights Legal Support Centre and will deliver the following services to help people understand and more effectively participate in the appeal process by:

  • Providing general information about land use planning.
  • Offering guidance to citizens on the tribunal appeal and hearing process.
  • Providing legal and planning advice at different stages of the appeal process, which may include representation in some cases.

Sheltering Major Planning Decisions from Appeal

The act also includes measures to exempt a broader range of major municipal land use planning decisions from appeal, which will provide municipalities with greater certainty and timely implementation of major decisions. The following matters will no longer be appealable under the Building Better Communities and Conserving Watersheds Act 2017:

  • Provincial approvals of official plans and official plan updates, including approvals of conformity exercises to provincial plans.
  • Minister’s Zoning Orders.

The act will also restrict applications to amend new secondary (i.e. neighbourhood) plans for two years, unless permitted by municipal council, and limit the ability to appeal an interim control by-law when first passed for a period of up to one year. The legislation also protects municipal policies that support appropriate development around protected major transit station areas, such as GO Train stations and subway stops.

Local Appeal Bodies will also be given more authority. They will be able to hear appeals on site plans, in addition to their current scope of minor variances and consents.

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Short-term Rentals were approved by city council

Short-term Rentals

Proposed regulations for short-term rentals were approved by City Council. A short-term rental is defined as renting for less than 28 days.

Staff recommendations to limit the use of short-term rental providers (such as Airbnb) to a person’s ‘principal residence’ were adopted.

A limit of 180 days per year was also placed on the rental of an entire home, while a room or portion of a home was not limited.

For further information: http://app.toronto.ca/tmmis/viewAgendaItemHistory.do?item=2017.LS23.1

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Availability of rental housing in GTA falls to 16-year low, CMHC says

Rental housing is getting harder to find in the Greater Toronto Area, although for those that already live here, that’s not likely news. But a new report from the Canada Mortgage and Housing Corporation provides a statistical look at just how tight the rental market has become.

The vacancy rate of rental properties in the GTA — the number of rental options currently available on the market —reached 1.1 per cent this fall, the lowest in 16 years.

Average costs for all types of rental housing that the CMHC examined (bachelor, one bedroom, two bedroom and three or more bedrooms) hit $1,296 per month, an increase of 4.5 per cent from the previous sample year.

  • Average rent for 2-bedroom apartment in Canada hits $989, up 2.7% in past year
  • Could finding an affordable place to live be THE election issue of 2018?

Record high home prices in Toronto, set during the late winter and early spring this year, as well as considerable migration of people to the GTA, likely contributed to a growing demand for rental accommodation.

Similarly, fewer people left rental homes, while construction of new rental housing supply was “insufficient” to offset that demand in any appreciable way, the CMHC found.

“Rising costs of home ownership and lack of new rental supply kept vacancy rates at historic lows,” CMHC market analyst Dana Senagama said Tuesday.

Combined, all these factors “allowed landlords to charge new tenants significantly higher rents, which led to the average rent growth to be above the provincial guideline” of 1.5 per cent, the report says.

  • New national housing strategy draws mixed reaction from Toronto social housing activists

For the second straight year, however, condos acted as the primary source of new rental supply, especially in Toronto proper.

While the CMHC revealed that the condo vacancy rate hit its lowest point in nine years, the ratio of rental condos to the total condo supply in the GTA stayed “virtually on par” with the previous year.

From May 2016 to May 2017, some 19,234 new condos were completed throughout the region.

Here are the average vacancy rates and monthly costs for each type of rental unit:

  • Bachelor: 1.2 per cent (down from 1.4 per cent); $1,011 per month (up from $957).
  • One bedroom: 1.2 per cent (down from 1.3 per cent); $1,191 per month (up from $1,132).
  • Two bedrooms: 1.0 per cent (down from 1.3 per cent); $1,392 per month (up from $1,327).
  • Three or more bedrooms: 1.0 per cent (down from 1.8 per cent); $1,563 per month (up from $1,515).
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Toronto home sales see above average 12% monthly jump in October, board says

oronto area home sales rebounded by 12 per cent from September to October, pointing to a stronger fall market after a policy-driven pullback from a frenzied market that peaked earlier this year.

The Toronto Real Estate Board said Thursday that 7,118 homes were sold in October, up from the month before but down 27 per cent from the same month last year.

“Every year we generally see a jump in sales between September and October. However, this year that increase was more pronounced than usual compared to the previous ten years,” said board president Tim Syrianos.

“While the number of transactions was still down relative to last year’s record pace, it certainly does appear that sales momentum is picking up.”
The average selling price in October was $780,104, up less than one per cent from September but up 2.3 per cent compared with October 2016. Price growth was driven by appreciation in the townhouse and condo segments.

The average price of a townhouse in the GTA was up 7.4 per cent at $629,507, while the average condo price was $523,041 up 22 per cent year-over-year, the most of any housing type. Meanwhile, the average price of a detached home was down 2.5 per cent year-over-year at $1 million. Prices of semi-detached homes rose 6.3 per cent to $764.293.

Sales in the first 10 months of the year slipped to 80,198, down 19 per cent from the same period in 2016. Sales have dropped more than 10 per cent from the record set in March before Ontario announced its housing plan.

A spike in Toronto-area home prices earlier this year resulted in the provincial government’s imposition of a number of measures to cool the market after a shortage of detached home listings helped push up prices.

In addition, the Bank of Canada has raised interest rates twice in recent months to the current overnight rate of one per cent, signalling a clampdown on cheap borrowing and driving the big bank prime rates and the cost of variable-rate mortgages higher. The cost of new fixed-rate mortgages have also risen as yields on the bond market have also risen.

Meanwhile, the Office of the Superintendent of Financial Institutions will implement new lending guidelines at the beginning of next year. Among the changes being considered is a requirement that homebuyers who do not require mortgage insurance still have to show they can make their payments if interest rates rise.

The policy-driven changes in the Toronto market, which include a tax on foreign buyers, have followed the trajectory of the Vancouver market, with a pullback directly after new rules were introduced followed by a pick up after a relatively short time, said TREB’s director of market analysis Jason Mercer.

“It appears that the psychological impact of the Fair Housing Plan, including the tax on foreign buyers, is starting to unwind.”
Vancouver home sales data from October is expected later Thursday.

The CHMC warned last month that the country’s hottest housing markets remain “highly vulnerable” with evidence of moderate overvaluation and price acceleration in Toronto, Hamilton, Vancouver, Victoria and Saskatoon.

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The Most Unaffordable Housing Markets In North America, Charted

Not only is the rent too damn high, housing prices are as well. But where is the situation the worst? The usual suspects — New York, San Francisco, Vancouver — top the list, but where else are things bad?

This chart from real estate firm Point2Homes ranks cities by their “median multiple” — the median home price divided by median household income. Take Vancouver, which tops the unaffordability list and has a median home sale price 17.3 times higher than the median household income:

 

 

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Toronto house-price slump ends with September rise

 

Greater Toronto home prices jumped in September as buyers appeared to put an end to a slump that began in the spring with government measures to cool a scorching real-estate market.

The Toronto Real Estate Board (TREB) said the average GTA home sold for $775,546 in September, up 5.9 per cent from August’s average of $732,292.

Prices were up 2.6 per cent compared with September last year, but remain 15.8-per-cent lower than they were at the market’s peak in April before the downturn began.

The market recovery last month was driven primarily by buoyant sales of detached houses in the city of Toronto, where average prices climbed 13.8 per cent in September compared with August. The average detached house sold for $1,355,234 in Toronto in September, still well less than the peak price of $1,578,542 recorded in April.

In the 905 region surrounding Toronto, however, average detached-house prices were virtually unchanged, climbing less than 1 per cent in September to an average of $912,921 as the GTA experiences an uneven upturn in activity.

“Tentatively, it looks like the worst is over for the Toronto housing correction,” Bank of Montreal economist Sal Guatieri said. “It’s a fairly minor correction to begin with – on a year-over-year basis, prices are still up from a year ago.”

If the market turned the corner in September, there are still signs it is far from the level of buyer frenzy seen earlier this year. TREB said the volume of homes sold in September fell 35 per cent compared with the same month last year, a decline that is in line with similar large drops in monthly sales volumes seen since June.

Mr. Guatieri said the decline comes off record levels in 2016, so is not as massive as it looks. Total monthly sales are only slightly lower than the 10-year average, he said.

Real estate agent Chris Slightham, president of Royal LePage Signature Realty, said the buyers he sees are calmer and more confident than they were in the spring and have realized “the world is still good from a real estate standpoint.”

“That frothiness of the spring has corrected itself – it has come back to a much more healthy number and looks like it has found its bottom,” he said.

Toronto’s market recovery is following an almost identical pattern to Vancouver’s market. The B.C. government implemented a new foreign-buyer’s tax last August, and average house prices immediately fell, hitting bottom by January this year, or roughly five months later. The Ontario government announced a similar foreign-buyer’s tax, among other measures, for the Toronto region in April, and it appears prices may have bottomed in August, about four months later.

Canadian Imperial Bank of Commerce deputy chief economist Benjamin Tal expects Toronto to have an uptick in prices akin to what Vancouver saw in April and May this year, but then to grow much more slowly than in the past, similar to Vancouver’s current slower-growth pace.

“Vancouver had a nice rebound and now is going kind of sideways, and that’s more or less what we’re going to see in Toronto, which is a good scenario,” he said.

Both cities have also seen the condominium sector emerge as the strongest growth area for residential real estate. Condo prices in Toronto climbed 2.5 per cent in September compared with August and are up 23 per cent over September, 2016. The Real Estate Board of Greater Vancouver reported on Tuesday that the benchmark price for condos was up 22 per cent in September compared with the same month last year, while detached house prices are up 2.9 per cent from a year ago.

Real estate agent Eryn Richardson, general manager of Century 21 Heritage Group, said agents in offices in suburban regions around Toronto did not see a flood of new home listings that some expected to come on the market in September, which meant there was not excess inventory causing downward pressure on prices.

New listings rose 9.4 per cent across the GTA in September after falling in August, creating balanced market conditions.

Mr. Richardson said agents in his firm have also seen the return of buyers who are looking for houses as investment assets, which he sees as another sign of turnaround in the market. Investors and speculators largely left the market in the spring and summer, when it was unclear how far prices would fall.

“Those people are starting to purchase again – those buyers have come back out,” he said. “Everything has cooled off, there’s no doom and gloom, and things have started to rebound from a perception standpoint.”

Mr. Tal said Toronto’s housing strength in September will likely spur Canada’s banking regulator, the Office of the Superintendent of Financial Institutions (OSFI), to move ahead with proposed mortgage stress-test changes.

A range of lending and real estate groups have urged the OSFI to hold off introducing tough new measures while Toronto’s market was struggling through a downturn, but Mr. Tal said the regulator will likely now conclude both Vancouver and Toronto markets are healthy enough to withstand new regulatory measures.

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GTA New Home Sales Recap

There were 795 total new home sales in August 2017, with 114 Low Rise sales, down -76% from August 2016 (down -88% from 10yr avg) and 681 High Rise sales, down -68% from August 2016 (down -42% from 10yr avg).

The New Home Benchmark Price tracks the average Low and High Rise home or unit price in the Greater Toronto Area for a particular month and compares it to the previous month in the same year and to the same month in the previous year.

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GTA new home sales strong year-to-date, high-rise dominates

 

August may have been quiet but 2017 so far has been a strong year for new home sales in the GTA, especially for the high-rise sector.

A report from the Building Industry and Land Development Association (BILD) shows that 31,749 homes have been sold in the 8 months to the end of August, 28% above the 10-year average for the period and above sales for the same period of 2016.

Data from the Altus Group reveals that August sales were down 69% year-over-year to just 795 new homes with multifamily units and condos in high rise buildings dominating with 681 sales. Just 114 were low-rise single-family homes.

“The longer-term decline in single-family’s share of new home sales has now kicked into hyperdrive –  dropping from about one-half in 2015, to one-third last year, to less than one-sixth in recent months,” said Patricia Arsenault, Altus Group’s Executive Vice President of Research Consulting Services. “While underlying demand suggests the pendulum should start to swing back a bit towards the single-family side, in reality it will be stopped in its tracks unless there is a significant increase in new single-family product making it to the market.”

Supply issues continue to restrict sales of new homes in the GTA, although there was a slight improvement with 6,608 multi-family homes and 1,880 single-family low-rise homes available in builders’ inventories at the end of August.

There was also a slight decrease in prices although average prices in both high and low-rise sectors remain more than a third higher than a year ago.

The average price for available new single-family low-rise homes was $1,289,298, down from July’s $1,316,693 and the average price of available multi-family homes in the GTA in August was $644,327, down from July’s average of $665,041.

BILD president and CEO Bryan Tuckey is expecting an improvement in sales for September.

“Late summer is a quiet time for real estate, and most builders wait until September to launch developments and bring new product to market,” said Tuckey. “We are expecting fall to be very busy, and 2017 could still be a record year of new home sales driven by the incredibly strong condo market.”

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Province to unlock additional land for housing

The Ontario government has addressed the province’s housing supply issue by vowing to unlock provincial land for the use of housing.

Toronto Mayor John Tory and Peter Milczyn, Minister of Housing and Minister Responsible for the Poverty Reduction Strategy, made the announcement in Toronto Wednesday morning.

The plan is to allow for the creation of 2,000 new affordable housing units in Toronto as part of the province’s Fair Housing Plan.

“Our communities are at their strongest when they make room for everyone,” Milczyn said. “By freeing up underused land to build a mix of market and affordable rental housing, more people in Ontario will be able to find an affordable home in neighbourhoods they love.”

The province has earmarked three sites for building; two lots in West Don Lands and one, which is currently a multi-level parking structure, in the downtown core between Bay and Yonge Streets south of Wellesley.

“This is a unique and innovative strategy to transform surplus provincial lands into much-needed rental housing units for individuals and families, a key part of our Fair Housing Plan,” Bob Chiarelli, minister of infrastructure, said.

This new program is one of 16 measures announced by the Ontario government earlier this year to address affordable housing in the province.

“The province is leveraging the value of this land to develop new rental and affordable housing units for individuals and families in Toronto,” the Ministry of Housing said in a release. “This will pave the way for strong neighbourhoods that will feature both market and affordable rental housing, including much-needed family-sized units, with up to 30 per cent of the units earmarked for affordable housing.”

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Yorkville Toronto Condo Sales Report, March 21 Through August 20, 2017

Since the end of April, we have heard many reports on how the [Toronto-Condo-Market-May-2017-New-Legislature-Effect-Toronto-Condo-Market-]Ontario Fair Housing Plan has changed the face of Toronto’s real estate market. We have heard diverse reports ranging from dire as the market has stalled and prices have dropped dramatically, to reports that there has been little impact on the Toronto market other than fewer sales.
I am going to dedicate myself to assist you in sorting out what effect the new legislature has had on the industry. I will not just give you blanket statements like we are hearing from Toronto’s media but focus on each downtown and midtown Toronto condo neighbourhoods so you may be able to see the changes based on the actual sales that have occurred in each area.
The first neighbourhood I will attack is [4a_custpage_109146.html]Yorkville in Downtown, Toronto around the Yonge, Avenue Road and Bloor area. This neighbourhood tends to has higher-end buildings and has been the most expensive condo area in Toronto.
I will breakdown by month beginning with March 21 – April 20 (the month prior to the changes) and moving through the 1st three months of the changes, as well as comparing with the year prior. We will explore the effects in both sales and prices and compare each category so you may see the real picture for this neighbourhood.
If you find this information useful, look for Bay Street Corridor Report next week. In the next few weeks, I will cover all of the downtown areas to give you true numbers for those looking to buy and sell. I think it is critical for all those who are interested in Toronto real estate, including real estate agents and brokers, to understand the changes and how it has affected the market. In fact, I am working towards reporting all this information by building because we are already seeing changes that are unique to each condo building.
It has been very interesting to look at the Yorkville, Annex, Toronto numbers. There has definitely been a decline in the number of sales over this period of time. In 2016 we saw the number of sales in the mid 30’s each month and this was the case prior to the change. However, from May 21st to June 20th there were 24 condo sales in the Annex, from June 21st to July 20th there were 19 sales and July 21st to August 20th there were 28 sales. What I find interesting is that the sales prices have actually increased on average.
The average sales price from March 21st through April 20th (prior to the rule change) was $1,174,126. The first month after the changes (April 21st to May 20th) we saw an increase of 7%, to $1,260,720. The second month (May 21st to June 20th) we saw a decrease in sales price to $1,055,403 but the market rebounded quickly in the 3rd month (June 21st to July 20th) to $2,091,889, an increase of 76%. The month showed a significantly higher increase, but it must be taken into consideration that there were 3 very expensive sales.
July 21st through August 20th saw the average sales price drop back, to $1,058,604, which I consider closer to the norm.  However, it is still up by more than 10% over the same period in 2016.
Prior to the change on April 21st, the price per square foot was $959.02 and we have seen this rise to as much as $1,038. In July-August we saw this figure remain strong at $1,019 per square foot. This is still a 6% increase over the March/April numbers.
Yorkville has remained a very strong market even after the changes. The numbers that truly supports the strength of the market is the average price per square foot and fewer listings. You can have a few high end deals that boost your sales price numbers but the price per square foot will always remain relevant. Over the past 5 months we have seen a rise in this number by as much as 8%.
For those who have been reluctant to sell their Yorkville condo due to what is being reported in the media, now is a great time to sell a Yorkville condos… it is still a strong sellers market!

 
July 21 – August 20, 2017
 
June 21 – July 20, 2017
 
May 21 – June 20 2017
 
Apr. 21 – May 20, 2017
 
Mar 21 – Apr. 20 2017
# of Sales
28
 
        19        
 
24
 
35 
 
 38
Ave. Listing Price 
$1,066,292
 
 $2,256,294
 
$1,055,403
 
 $1,260,720
 
 $1,174,126
Ave. Sales Price 
$1,058,604 (-11%)   since change
 
$2,091,889 (+25%)  since change 
 
$1,058,571 (-11%)   since change
 
 $1,254,492
 
 $1,188,827
Aprox Ave $ per sq. ft.
$1,019.10 (+6%) since change
 
$1,039.94 (+8%) since change
 
$928.11 (-3%) since change
 
 $993.48
 
 $959.02
% of Sold to Listing Price
99%
 
93% 
 
103 %
 
 99%
 
 101%
 
July 21 – August 20, 2016
 
 June 21 – July 20, 2016
 
May 21 – June 20 2016 
 
 Apr. 21 – May 20, 2016
 
 Mar 21 – Apr. 20 2016
# of Sales
 24
 
32
 
33
 
31
 
39
Ave. Listing Price 
 $980,762
 
$916,284
 
$921,586
 
$856,516
 
$793,387
Ave. Sales Price 
 $959,661 
 
$891,469
 
$894,784
 
$840,425
 
$789,891
Aprox Ave $ per sq. ft.
$817.07 
 
$736.02
 
$742.67
 
$600.76
 
$717.34
% of Sold to Listing Price
98% 
 
 97%
 
97%
 
98%
 
106%
 
 
 
 
 
 
 
 
 
 
July 21 – Aug. 20 2017
 
 
 
 
# of Suites 
 
Ave Sales Price 
 
Aprox. Price per Square foot 
Studios / Bachs
 
 
 
 
1
 
$399,999
 
$690.84
1 Bedrooms
 
 
 
 
9
 
$596,889
 
$954.41
1 Bdrm + Den
 
 
 
 
6
 
$689,483
 
$960.61 
2 Bedrooms
 
 
 
 
6
 
$762,833
 
$913.12 
2 Bdrm + Den
 
 
 
 
4
 
$2,898,750
 
$1,547.16 
3 Bedrooms
 
 
 
 
2
 
$1,780,000
 
$911.64 
3 + 1 Bdrm
 
 
 
 
–
 
–
 
 –
4 Bedroom
 
 
 
 
–
 
–
 
 – 
 
 
 
 
 
 
 
 
 
 
June 21 – July 20 2017
 
 
 
 
# of Suites 
 
Ave Sales Price 
 
Aprox. Price per Square foot 
Studios / Bachs
 
 
 
 
0 
 
– 
 
– 
1 Bedrooms
 
 
 
 
5
 
$563,980 
 
$906.67 
1 Bdrm + Den
 
 
 
 
4 
 
$580,000 
 
$956.67 
2 Bedrooms
 
 
 
 
3 
 
$843,667 
 
$772.23 
2 Bdrm + Den
 
 
 
 
2 
 
 $3,177,500
 
 $1,403.70 
3 Bedrooms
 
 
 
 
3 
 
$2,948,333 
 
 $1,101.71
3 + 1 Bdrm
 
 
 
 
0 
 
– 
 
– 
4 Bedroom
 
 
 
 
2 
 
$8,437,500 
 
$2,969.56 
 
 
 
 
 
 
 
 
 
 
May 21 – June 20 2017
 
 
 
 
# of Suites
 
Ave Sales Price
 
Aprox. Price per Square foot
Studios / Bachs
 
 
 
 
0
 
–
 
–
1 Bedrooms
 
 
 
 
9
 
$761,296
 
$997.19
1 Bdrm + Den
 
 
 
 
7
 
$689,514
 
$834.14
2 Bedrooms
 
 
 
 
12 
 
$1,247,500 
 
 $986.56
2 Bdrm + Den
 
 
 
 
 6
 
 $1,616,666
 
$1,120.87 
3 Bedrooms
 
 
 
 
 3
 
 $1,541,166
 
$1,196.87 
3 + 1 Bdrm
 
 
 
 
 0
 
– 
 
 –
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Ontario’s Fair Housing Plan

Ontario’s Fair Housing Plan introduces a comprehensive package of measures to help more people find affordable homes, increase supply, protect buyers and renters and bring stability to the real estate market. The plan includes:

Actions to Address Demand for Housing:

Introducing legislation that would, if passed, implement a new 15-per-cent Non-Resident Speculation Tax (NRST) on the price of homes in the Greater Golden Horseshoe (GGH) purchased by individuals who are not citizens or permanent residents of Canada or by foreign corporations. Ontario’s economy benefits enormously from newcomers who decide to make the province home. The NRST would help to address unsustainable demand in this region and make housing more available and affordable, while ensuring Ontario continues to be a place that welcomes all new residents. The proposed tax would apply to transfers of land that contain at least one and not more than six single family residences. “Single family residences” include, for example, detached and semi-detached homes, townhomes and condominiums. The NRST would not apply to transfers of other types of land including multi-residential rental apartment buildings, agricultural land or commercial/industrial land. The NRST would be effective as of April 21, 2017, upon the enactment of the amending legislation.

Refugees and nominees under the Ontario Immigrant Nominee Program would not be subject to the NRST. Subject to eligibility requirements, a rebate would be available for those who subsequently attain citizenship or permanent resident status as a well as foreign nationals working in Ontario and international students. See technical bulletin for further information.

Actions to Protect Renters

Expanding rent control to all private rental units in Ontario, including those built after 1991. This will ensure increases in rental costs can only rise at the rate posted in the annual provincial rent increase guideline. Over the past ten years, the annual rent increase guideline has averaged two per cent. The increase is capped at a maximum of 2.5 per cent. Under these changes, landlords would still be able to apply vacancy decontrol and seek above guideline increases where permitted. Legislation will be introduced that, if passed, will enact this change effective April 20.‎
The government will introduce legislation that would, if passed, strengthen the Residential Tenancies Act to further protect tenants and ensure predictability for landlords. This will include developing a standard lease with explanatory information available in multiple languages, tightening provisions for “landlord’s own use” evictions, and ensuring that tenants are adequately compensated if asked to vacate under this rule; prohibiting above-guideline increases where elevator work orders have not been completed; and making technical changes at the Landlord-Tenant Board to make the process fairer and easier for renters and landlords. These changes would apply to the entire province.

Actions to Increase Housing Supply

Establishing a program to leverage the value of surplus provincial land assets across the province to develop a mix of market housing and new, permanent, sustainable and affordable housing supply. Potential sites under consideration for a pilot project include the West Don Lands, 27 Grosvenor/26 Grenville Streets in Toronto, and other sites in the province. This builds on an agreement reached previously with the City of Toronto to ensure a minimum of 20 per cent of residential units within the West Don Lands are available for affordable rental, with an additional 5 per cent of units for affordable ownership.
Introducing legislation that would, if passed, empower the City of Toronto, and potentially other interested municipalities, to introduce a vacant homes property tax to encourage property owners to sell unoccupied units or rent them out, to address concerns about residential units potentially being left vacant by speculators.
Ensuring that property tax for new multi-residential apartment buildings is charged at a similar rate as other residential properties. This will encourage developers to build more new purpose-built rental housing and will apply to the entire province.
Introducing a targeted $125-million, five-year program to further encourage the construction of new rental apartment buildings by rebating a portion of development charges. Working with municipalities, the government would target projects in those communities that are most in need of new purpose-built rental housing.
Providing municipalities with the flexibility to use property tax tools to help unlock development opportunities. For example, municipalities could be permitted to impose a higher tax on vacant land that has been approved for new housing.
Creating a new Housing Supply Team with dedicated provincial employees to identify barriers to specific housing development projects and work with developers and municipalities to find solutions. As well, a multi-ministry working group will be established to work with the development industry and municipalities to identify opportunities to streamline the development approvals process.

Other Actions to Protect Homebuyers and Increase Information Sharing

The province will work to understand and tackle practices that may be contributing to tax avoidance and excessive speculation in the housing market such as “paper flipping,” a practice that includes entering into a contractual agreement to buy a residential unit and assigning it to another person prior to closing.
Working with the real estate profession and consumers, the province is committing to review the rules real estate agents are required to follow to ensure that consumers are fairly represented in real estate transactions. This includes practices such as double ending. The government will modernize its rules, strengthen professionalism and improve the home-buying experience with a goal to make Ontario a leader in real estate standards.
Establishing a housing advisory group which will meet quarterly to provide the government with ongoing advice about the state of the housing market and discuss the impact of the measures in the Fair Housing Plan and any additional steps that are needed. The group will have a diverse range of expertise, including economists, academics, developers, community groups and the real estate sector.
Educating consumers on their rights, particularly on the issue of one real estate professional representing more than one party in a real estate transaction.
Partnering with the Canada Revenue Agency to explore more comprehensive reporting requirements so that correct federal and provincial taxes, including income and sales taxes, are paid on purchases and sales of real estate in Ontario.
Making elevators in Ontario buildings more reliable by establishing timelines for elevator repair in consultation with the sector and the Technical Standards & Safety Authority (TSSA).
Working with municipalities to better reflect the needs of a growing Greater Golden Horseshoe through an updated Growth Plan. New provisions will include requiring that municipalities consider the appropriate range of unit sizes in higher density residential buildings to accommodate a diverse range of household sizes and incomes. This will help support the goals of creating complete communities that are vibrant, transit-supportive and economically competitive, while doing more to address climate change, protect the region’s natural heritage and prevent the loss of irreplaceable farmland. As part of the implementation of the Growth Plan for the Greater Golden Horseshoe, 2006, enough land was set aside in municipal official plans to accommodate forecasted growth to at least 2031. Based on discussions with municipalities across the region, the government is confident that there is enough serviced land to meet the Provincial Policy Statement requirement for a three year supply of residential units. The Greenbelt provides important protection of natural heritage and farmland, and neither the area of the Greenbelt or the rules about what can occur inside of it will be weakened. The upcoming Growth Plan will promote intensification around existing and planned transit stations and will promote higher densities in the suburbs to support transit.

See map “Greater Golden Horseshoe”.

Actions to Date

The government has taken a number of actions over recent months and years in order to support homebuyers, increase supply of affordable and rental housing and promote fairness. These include:

Helping more people purchase their first home by doubling the maximum Land Transfer Tax refund for eligible first-time homebuyers to $4,000. This means eligible homebuyers in Ontario pay no Land Transfer Tax on the first $368,000 of the cost of their first home.
Modernizing the Land Transfer Tax to reflect the current real estate market, including increasing rates on one or two single-family residence over $2 million. Revenue generated from the increased rates is being used to fund the enhancements to the First-Time Homebuyers Refund.
Making it easier for not-for-profit affordable housing providers to buy surplus government lands.
Introducing an inclusionary zoning framework for municipalities that will enable affordable housing units as part of residential developments.
Amending the Planning Act and the Development Charges Act to support second units, allowing homeowners to create rental units in their primary residence and creating additional supply.
Freezing the municipal property tax burden for multi-residential apartment buildings in communities where these taxes are high.
Collecting information about Ontario’s real estate market to support evidence-based policy development

Appendix: Data and Trends on the Real Estate Market

Ontario’s housing market has seen very dynamic growth in recent years, with prices in the Greater Toronto Area and the Greater Golden Horseshoe rising significantly. This has been supported by economic fundamentals, including a growing population, rising employment, higher incomes and very low borrowing costs.

House prices have been rising at a robust pace in the Greater Toronto Area since the end of the 2008-09 recession.

After two consecutive years of double-digit gains, average house prices in the Toronto region reached $916,567 in March 2017, up 33.2 per cent from a year earlier.

See image “Toronto Home Resale Prices”

The Greater Toronto Area showed the sharpest rise in home prices in Ontario over the past two years.

While the growth rate of prices of homes in the Greater Vancouver Area have been slowing since August 2016 after the introduction of B.C.’s foreign-buyers tax, home prices have been climbing steadily in the Greater Toronto Area.

See image “MLS Home Price Index”, “Greater Toronto Area Price Increases Outstrip Other Cities” and “Housing supply in Ontario seems to be aligning with demographics”.

According to Urbanation, the average rent per square foot for new leases in the Greater Toronto Area condo market rose 11 per cent in the last quarter of 2016 compared to a year earlier, the fastest pace of growth since at least 2011.

See image “% change, year-over-year, GTA”.

The number of owners with more than one residential property has been rising steadily since 2000.

See image “Number of Owners With More Than One Residential Property in the GTHA: 2000-16”.

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