Lack of Supply Driving GTA House Price Surge, Studies Say

Several new reports released yesterday indicate how much the lack of supply among detached houses, townhouses as well as other ground-orientated housing has influenced house prices in the GTA.

Last month, sales activity and prices in Toronto both broke new records, however, the Toronto Real Estate Board also stated that there was a troubling trend of shrinking supply of homes up for sale, especially detached houses.

According to a study conducted by Ryerson University, most potential home buyers in the region say they prefer a detached home or other low-rise homes such as townhouses. Although provincial policies have encouraged a dramatic shift toward constructing condominiums rather than houses, home buyers still prefer low-rise homes.

This has been determined by analyzing a number of recent surveys conducted in relation to consumer housing wants and preferences in the Greater Toronto Area.

The research was conducted by Frank Clayton, senior research fellow at Ryerson University’s Centre for Urban Research and Land Development. The research further indicated that low-rise homes made up 66 per cent of all homes sold in the GTA last year and condos made up 34 per cent of all homes sold in the GTA last year.

Frank Clayon stated that many households prefer a single-detached home with a yard. He said that a lack of supply of low-rise homes and more high-rise condominium construction will lead to even higher home prices.

He also stated that this can lead to big capital gain jackpots for fortunate owners of existing homes and vacant lands where low-rise homes could be constructed.

Reference:

The Globe and Mail

http://www.theglobeandmail.com/…/lack-of-s…/article31400787/