There has been a lot of concern that Toronto’s housing market is a bubble waiting to burst.
As a member of the council’s economic development committee I recently heard a report that such fears are not well grounded.
In the past 10 years, house prices have increased by 72 percent in Toronto, which is a lot less than the other nine major Canadian cities. For example, Winnipeg house prices are up by 152 percent in the past 10 years.
How do things today compare to the lead up to Toronto’s 1989 house price crash?
Well, in the four years before that crash, house prices in Toronto increased by 151 percent, compared to a 24 percent increase in the past four years.
The cranes sprinkled across the Toronto skyline have some people concerned that we are building too many new condos. About 100,000 people move to the Toronto area every year.
At an average of 2.5 people per home, that means we need about 40,000 new homes a year to keep up, which is just about the actual rate of construction.
Others worry the condo market is too dependent on overseas investors and this results in more condos being built than are really needed.
Yet investors are why about 22 percent of condos in Toronto are rented, providing much needed rental housing in Toronto. In the year after October 2010, the vacancy rates for rented condos dropped from 1.6 percent to 1.1 percent and in regular rental units the rate dropped to 1.4 percent.
Remember, if we don’t build enough housing, the cost of housing will increase even faster than it already is. For many Toronto residents this is the bigger concern. I think it’s great that so many people want to live and invest in Toronto, but we have to preserve what it is that attracts these people.
There is more good news and some words of caution in the report — a link to which you can find on my website.
I had some questions about the thoroughness of the report. City staff agreed to look into my concerns.
I believe city council needs to help provide stewardship for Toronto’s overall prosperity. There are of course many factors outside of our control.
The delicate mix that has attracted so many people to Toronto needs to be carefully cultivated.
About this article: