More Torontonians want hard-to-find detached homes, study says
'The real Canadian dream' is becoming harder to reach, real estate agent says
More Torontonians are eyeing detached homes, even though those properties are the most difficult to snag.
A new study by the Ontario Real Estate Association surveyed 1,003 Ontarians looking to purchase a home. Fifty per cent of them said they plan to buy a detached home in the next two years.
In Toronto, that's up 21 percentage points from a year ago. Across Ontario, it's up 13 percentage points.
But the supply of detached homes in Toronto is at an all-time low.
"The real Canadian dream is to have sole home ownership with land so you can grow your family," said Joel Langlois, a real estate agent with Keller Williams Referred Urban Realty. "So you find out your client's needs and what they want, but then when you go shopping nothing exists."
Just 537 homes for sale
In a city of almost three million people, only 537 detached homes were listed for sale on the Toronto Real Estate Board at noon Wednesday.
Langlois says he's not surprised and that his clients are often frustrated by the lack of supply.
When they do find something that suits their needs, Langlois says, the competition is fierce and that drives prices up.
"I'll get clients that will finally find their dream home, they have a budget in mind, they can only go up so much and when we go in to make an offer, they often get into a bidding war."
A fall report on the housing outlook for the Greater Toronto Area found demand for single detached homes will be particularly strong in 2017, yet fewer of them will be built because of "zoning restrictions and land-use policies favouring high-density construction."
The Ontario government created growth plans for the Greater Horseshoe region in the early 2000s. These plans restrict where a developer is allowed to build and what type of construction can be erected.
"There's a number of reasons for this," said Phil Stewart, an urban planner with Pound and Stewart Planning. "There's the preservation of agricultural land. There's only so much of it in Ontario, because you don't have to go too far north before you hit the Canadian Shield — basically a rock."
Stewart says the other reason is that the government wants to protect geological features such as the Niagara Escarpment.
Tim Hudak, CEO of the Ontario Real Estate Association, says that there is still room to build more homes in Toronto.
"There are old industrial areas," said Hudak. "It makes a lot of sense to increase density along the subways lines."
Hudak says the province is reviewing the growth plan for Ontario and has been receptive to OREA's suggestions.
"We've had personal meetings with them," said Hudak. "To their credit they've doubled the land transfer tax relief for first-time home buyers."
He says now it's Toronto's turn to rethink its land transfer tax because that prevents many people from moving.
"Toronto is unique in Canada in having a land transfer tax," said Hudak.
"On the street we've lived on in Toronto, we've probably met seven or eight couples who needed more space because they had kids. But they found the land transfer tax intimidating, so instead of moving they chose to renovate their property. That means there's another young couple who won't be able to buy that home."
With prices of a detached home in Toronto sitting at just over $1 million, people pay from $40,000 to $50,000 in provincial and municipal land transfer taxes combined.
Prices rise outside Toronto
Langlois says the general unaffordability of a home in Toronto is pushing buyers to "opt for longer commutes to get the detached homes and that Canadian dream."
The influx of Torontonians to cities like Whitby is driving housing prices up in that region.
Hudak says that trend is going to continue unless laws change and supply increases.