More important problems than foreigners are plaguing the Toronto housing market, analysts argue
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While the jury is still out on the impact of foreign buyers or the effects of recent policy changes on the Toronto real estate market, a pair of Fraser Institute academics stated that what is certain is the inescapable influence of the laws of supply and demand.
In a recent guest column for the Toronto Sun, analysts Josef Filipowicz and Steve Lafleur argued that “it’s hard to believe a small percentage of buyers are responsible for the massive appreciation of housing prices in the GTA over the past decade.”
“Rather than focus on a small group of buyers, we should focus on ensuring government regulations don’t prevent the supply of new housing from meeting demand,” the duo wrote.
Filipowicz and Lafleur added that inbound migrants drawn in by Ontario’s strong fundamentals are not the problem as long as regulatory red tape continues to stymie the development of new housing space.
“In the Greater Golden Horseshoe, it typically takes one-and-a-half years to obtain a permit. Per-unit costs to comply with regulations are almost $50,000,” they said. “Approval timelines can also be affected by the need to rezone property. Approximately two-thirds of new homes in the region require this procedure, which adds 4.3 months, on average, before builders can obtain permits.”
This represents a glaring omission in the current form of the Fair Housing Plan. “Only one of the 16 measures proposed by Queen’s Park in April even mentions these barriers to housing construction.”
The Fraser Institute analysts expressed hope that the Plan’s reference to a “Housing Supply Team” will eventually lead to greater cooperation with developers and municipalities “to identify opportunities to streamline the development approvals process.”
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In a recent guest column for the Toronto Sun, analysts Josef Filipowicz and Steve Lafleur argued that “it’s hard to believe a small percentage of buyers are responsible for the massive appreciation of housing prices in the GTA over the past decade.”
“Rather than focus on a small group of buyers, we should focus on ensuring government regulations don’t prevent the supply of new housing from meeting demand,” the duo wrote.
Filipowicz and Lafleur added that inbound migrants drawn in by Ontario’s strong fundamentals are not the problem as long as regulatory red tape continues to stymie the development of new housing space.
“In the Greater Golden Horseshoe, it typically takes one-and-a-half years to obtain a permit. Per-unit costs to comply with regulations are almost $50,000,” they said. “Approval timelines can also be affected by the need to rezone property. Approximately two-thirds of new homes in the region require this procedure, which adds 4.3 months, on average, before builders can obtain permits.”
This represents a glaring omission in the current form of the Fair Housing Plan. “Only one of the 16 measures proposed by Queen’s Park in April even mentions these barriers to housing construction.”
The Fraser Institute analysts expressed hope that the Plan’s reference to a “Housing Supply Team” will eventually lead to greater cooperation with developers and municipalities “to identify opportunities to streamline the development approvals process.”
Related stories:
OECD predictive model forecasts a 28% decline in home prices by 2020
Has Ontario’s housing plan achieved its goal?
