A lot of the news recently discuss one of the most sensitive issues in the GTA real estate market - housing affordability. Let us look into this and other topics with a quick overview of the last week's news highlights:
CBC News: Forget buying a house in Toronto: Cottages are the new ownership dream for young people, says report
Struggling to enter Toronto’s hot housing market, almost two-thirds of Canadian millennials consider buying a cottage, cabin or a ski chalet outside the city. The buyers complain that the city is too congested, too busy and unaffordable. One more factor pulling millennials towards the cottage country is a wish to live in more enjoyable, natural, off-grid environment. The buyers are mostly not planning to move to their cottages and cabins permanently and use them for recreational purposes. However, with the technology allowing people to work remotely and move away from the city, more and more people are considering this option.
Meanwhile, the cottage country housing market is heating up: In Muskoka, the number of listings is down 41 per cent since 2016, with sales are up 21 per cent. Moreover, the region started to see bidding wars, which used to happen very rarely before. However, even with the prices rising, the average price of a property in Haliburton is $66,038, still a bargain for anyone used to Toronto prices.
When it comes to luxury rentals, Toronto price rates are among the fastest-rising in the world, a study suggests. Growth of luxury apartment rents in Toronto reached 2.4 per cent annually in the first quarter of the year, according to Knight Frank’s Prime Global Rental Index. With this number, Toronto is on the fourth place among 17 luxury markets, behind Cape Town, Zurich and Guangzhou. This stable growth is attributed mainly to the supply and demand factors, such as population growth and not sufficient supply.
In the second quarter of this year, Ontario announced it was expanding rent control to apply to all rental units in the province. Previously, only buildings constructed before 1991 had rent increases limited. However, it is predicted that the introduction of this policy measure will only have a short-term impact, while the long-term trend will depend on market’s supply.
Toronto Sun: Realtors want those who break the rules tossed out
A guest article by Tim Hudak and Ettore Cardarelli, the CEO of the Ontario Real Estate Association and its president, discusses a proposal to protect the customers by ensuring that the real estate agents don’t break the rules. Ontario realtors suggested 3 major updates in government policies. First, they call for a more demanding process of getting a real estate license and higher standards of real estate agents’ education. Second, they insist on strengthening the real estate industry’s code of ethics. Third, higher fines and stricter punishments for unethical behavior are suggested.
It should be noted, that one of important steps for improving the quality standards for realtors’ services was taken by the government of Ontario recently, when it proposed banning the “double-ending” – a practice, in which the agent represents both a buyer and a seller.
Bryan Tuckey, the president and CEO of the Building Industry and Land Development Association (BILD) and land-use planner, claims that the laneway homes deserve a look as a way to increase supply and housing affordability. A lane-way house is a low-rise structure with an entrance on a laneway, that is detached from the main house but is dependent on it in terms of water, sewer, electricity and gas. Laneway housing is suitable for extended families seeking to re-unite: empty nesters, aging parents and adult children.
Last week, the Toronto and East York Community Council reviewed a number of recommendations for laneway housing. Vancouver, Ottawa and Regina have already adopted laneway housing, while in Toronto laneway housing is currently banned. Bryan Tuckey holds that eliminating the barriers for laneway housing would add more options for people who are looking for affordable housing in the GTA.
The Rent Café Blog: Toronto is still renter-friendly compared to other cities of opportunity worldwide
Taking into account the average rents on the markets and the median incomes, the article shows a ranking of 30 global cities according to their rent-to-income ratios. The housing costs exceeding 30 per cent of the household income have been viewed traditionally as problematic, while those below 30 per cent are considered less rent-burdened.
Toronto, with its rent-to-income ratio 29 per cent, is still below the “red flag” line and takes an 11th place among 30 global cities of opportunity in terms of affordability of the rentals. The most affordable housing can be found in Kuala Lumpur, Moscow and Johannesburg and the worst situation can be observed in Mexico City, New York’s Manhattan and Nigerian Lagos, where the rent-to-income ratio exceeds 55 per cent.