Knight Frank just released the 16th edition of its Wealth Report along with the disclaimer that, with everything going on in Ukraine right now, this outlook is of “little relative importance” and kind of doesn’t matter in the grand scheme of things. In any event, it includes the latest edition of their Prime International Residential Index (PIRI 100), which looks at the annual % change in luxury residential prices around the world. The chart is interactive, but I screenshotted (above) the top risers and fallers.
Toronto is 4th in the Americas and 7th globally with a 20.3% year-over-year increase.
Miami is also no surprise and came in 4th globally.
The top three cities were Dubai, Moscow, and San Diego.
Thankfully though, the number two city is in serious jeopardy right now and I suspect that its position will look quite different next year.
Money will go where it feels safe and secure.
Would you move further out of the city to secure the type of home you’re looking for within budget?
Given how popular work from home has been in the last few years, the option to choose home type first and city second is opening up to more buyers in Southern Ontario.
In fact, a Zoocasa survey early last year found that the pandemic has led to 32% of Ontario buyers purchasing a property in a location further than what they would have previously considered – and given the consistent price increases recorded across the province throughout 2021, it’s safe to say that trend has continued.
Buyers who have their eye on a certain type of home, whether that’s a condo in the city centre or a townhome with a yard for their dog, can save big if they can be flexible on which city in the Toronto Region they’d like to make their purchase in.
To help prospective buyers narrow down which areas they should consider focusing their house search in, Zoocasa has ranked the top five most affordable cities within the bounds of the Toronto Regional Real Estate Board to buy a detached home, semi, condo townhouse, and condo apartment based on November 2021 sales data*.
In other words, if finding the right type of home at the right price point is more important to you than buying in any particular city, this report is designed to help you discover which cities to consider in your home search.
Brock is the Most Affordable Place to Purchase a Detached Home
Although the average price for a detached home in the Toronto Region hit $1,567,832 near the end of last year the top five most affordable cities to buy a detached home in the greater region all clock in with an average price under a million dollars – a significant savings of more than $500,000.
Brock, the most affordable city on the list, is a small town in the north end of Durham township. As of 2016, the population reached just over 11,000 – making it a great choice for buyers looking for more space and a small-town lifestyle.
With an average price of $774,500, detached homes here are half the price of the region’s average. However, affordability comes with a proximity tradeoff. Brock is located in the Toronto Region’s farthest north reaches, and nearly borders Lake Simcoe. In good traffic conditions, you can reach Union Station by car in a little over an hour and a quarter, but Barrie and Peterborough are both closer cities – meaning you likely won’t want to commit to a daily, downtown Toronto commute if you’re living here.
If you’re looking to live a little closer to Toronto’s core, Oshawa and Orangeville both offer better connectivity to the rest of the GTA, with detached homes still coming in at an average price of less than a million. If you’re looking for small-town living, Essa (near Barrie) and Scugog (near Port Perry) are other options on the list that round out our top 5 most affordable places to buy a detached home in the Region.
Orangeville is Also the Most Affordable Place to Buy a Condo Townhouse
If things like multiple floors of living space and access to private outdoor space are high on your wishlist, a condo townhouse might be an affordable option for you to consider. Combining the higher-density building form and ownership structure of a condo, these homes are a great blend of space and affordability, especially for young families.
Regardless of your desired city, the average price in the Toronto Region is $826,475 for a condo townhome, which is well below the average price of all home types. When looking for the most affordable cities to choose from, Orangeville comes out on top again with an average price of $570,625 for this type of home.
The rest of our more affordable options come from Durham Region, with the cities of Oshawa, Whitby, Clarington, and Pickering rounding out the remaining spots on the list.
Oshawa is the Most Affordable Place to Buy a Condo Apartment
Condo apartments are one of the most affordable home types on the market in the Toronto Region today, with the average price as of November hitting $711,933 – a rate that comes in at over half the cost of the average detached home.
Within this category, you can find options with average prices under $400,000 if you consider moving to Oshawa, where the average price for a condo apartment was just $381,795 near the end of 2021.
Compared to some of the other cities that topped our list of affordability, Oshawa is considerably larger and more connected. With a population of 170,071 you’ll find more big-city amenities than what’s offered in Orangeville and Brock.
When it comes to your commute, you can make it downtown in 45 minutes by car in good traffic conditions, and taking public transit to work is a viable option with frequent GO Train service.
Other cities that top the list for the most affordable places to buy a condo apartment in the Toronto Region include Orangeville, New Tecumseth, Brampton, and Newmarket
What Do Buyers Need To Know About Moving Further Away From The City Centre?
According to Zoocasa Sales Representative, Allyson Neves, many of today’s buyers understand that being flexible on the location of their home purchase can help them check more boxes off of their wishlist
“Lately when I’m working with buyers, they’re coming to me with their top budget and wishlist for their home then asking me where they’ll need to move to marry the two. It becomes my job to help introduce them to new neighbourhoods or smaller towns that they may not have considered previously” she explains.
When working with buyers with this mindset, Neves starts the process off by understanding the non-negotiables. “It really comes down to knowing your price point first, along with anything else that binds you to a certain general location.”
“Usually buyers will come to me with a general bound for their location. This used to commonly be ‘no more than an hour from the office’. However, with work from home or hybrid options becoming the norm in many industries, I’m more often hearing ‘no more than an hour from my family’, or ‘I’d like to stay north of Toronto’. I compare this request with their budget and talk about which areas would be a fit for what they’re looking for in a property. From there, we start our house hunt. If you’re a buyer with this mindset, it’s helpful to work with an agent who really knows the general area you’d like to purchase in, they’ll be able to introduce you to some of the best places to consider during your search.”
While this report focused on the most affordable locations to purchase in the GTA outside of the city centre, this same mindset can still be applied for buyers looking outside of Toronto too. Neves, who is based out of Barrie explains, “as an agent that specializes outside of the GTA, it’s been a real pleasure introducing buyers who are new to the area to all that outside-of-Toronto living has to offer. Many are excited to trade city living for more space.”
Who doesn't love a good map? Maps are so much more than just a nice-looking view of an area. They can be highly useful as a way to effectively display data about an area in a way that is immediately readable. In real estate, maps are crucial for all sorts of tasks like title searches, zoning, land surveys, and more.
In a city like Toronto, there is so much different variety between areas and one of the best ways to view these differences is through mapping. For investors, these maps present a quick and easy way to learn about areas in the city and compare them to one another. For example, if you are looking at an area to buy in, these maps could give you a better idea of the nearby area in detail and in less time than going for a walk around on the street. Let's take a look!
Neighbourhoods map
This map gives you an idea of the many different neighbourhoods in Toronto today. From downtown Toronto to the edges of the city, each of Toronto's 140 neighbourhoods has its own unique history and community. Learn more about each of Toronto's neighbourhoods on the city's website, or read our list of top neighbourhoods here.
Toronto city zoning map
This detailed map shows the various different zones in the city of Toronto. It can be pretty surprising to see just how much of the city mixes commercial, residential, industrial, and open space, and how some areas are distinctly reserved for one or two zoning types.
Crime maps
You might be wondering what crime has to do with real estate? Well, if you are looking to invest in a property, especially if you plan on renting out that property, crime rates can affect how desirable the neighbourhood is, and therefore how your investment may perform and how much rent you can collect. The Toronto police provide multiple interactive maps to keep you informed on where certain crimes are statistically more common and which areas are the safest of all.
Toronto transit maps
One of the biggest considerations for people looking to rent in the city is how they are going to get around. For many, public transit is the way they get around every day and is well connected to the rest of the city can save time and headaches. This Toronto map shows all the different subway, streetcar, and bus routes in the city. It's amazing how connected we are!
Parks and trails
If you are looking to escape from the concrete and noise of the city, there are many public parks and trails that residents can enjoy – more than you might expect. The trick is in finding these areas. This handy map can help you find some greenspaces near you for when you need to get away close to home.
And many more
On the city of Toronto maps page and the open data directory, you can find many more maps for everything from tourist attractions to outdoor ice rinks (see above). This site is definitely a must-see for a map-loving Torontonian – though some maps may be more useful than others.
The January 2022 Market Update affirms Ontario’s historic commitment to modernizing the province’s public assets, including hospitals, highways, public transit, children’s treatment centres, courthouses and correctional facilities.
IO’s first Market Update for 2022 includes 39 projects, with 24 projects in pre-procurement and 15 in active procurement, totalling an estimated $60 billion in contract value.
The list also includes 14 additional government-announced projects in early stages of planning and determining the project’s scope, timing and delivery model.
IO continues ongoing productive discussions with the industry as we move forward on this large portfolio of projects and we are pleased to provide the latest information on changes in the procurement status of our projects.
A new year brings a new set of tax numbers, and here are the important figures you need to know for 2022.
Each year, most (but not all) income tax and benefit amounts are indexed to inflation. The Canada Revenue Agency in November 2021 announced the inflation rate used to index the 2022 tax brackets and amounts would be 2.4 per cent. This rate was calculated by taking the percentage change in the average monthly consumer price index data as reported by Statistics Canada for the 12-month period ended Sept. 30, 2021, relative to the average CPI for the 12-month period ended on Sept. 30, 2020.
Increases to the tax bracket thresholds and various amounts relating to non-refundable credits took effect on Jan. 1, 2022. Increases in amounts for certain benefits, such as the GST/HST credit and Canada Child Benefit, however, only take effect on July 1, 2022. This coincides with the beginning of the program year for these benefit payments, which are income tested and based on your prior year’s net income, to be reported on your 2021 tax return due this spring.
Tax brackets for 2022
All five federal income tax brackets for 2022 have been indexed to inflation using the 2.4-per-cent rate. The 2022 federal brackets are: zero to $50,197 of income (15 per cent); more than $50,197 to $100,392 (20.5 per cent); above $100,392 to $155,625 (26 per cent); over $155,625 to $221,708 (29 per cent); and anything above that is taxed at 33 per cent. Each province also has its own set of provincial tax brackets, most of which have also been indexed to inflation, but using their respective provincial indexation factors.
Basic personal amount (BPA)
This is the amount of income an individual can earn without paying any federal tax. You may recall the government in December 2019 announced an increase of the BPA annually until it reaches $15,000 in 2023, after which it will be indexed to inflation.
For 2022, the increased BPA has been set by legislation at $14,398, meaning an individual can earn up to this amount in 2022 before paying any federal income tax. The value of this federal credit for taxpayers earning more than this amount is calculated by applying the lowest federal personal income tax rate (15 per cent) to the BPA, making it worth $2,160. (Because the credit is “non-refundable,” it’s only worth the maximum amount if you otherwise would have paid that much tax in the year.)
But higher-income earners may not get the full, increased BPA since there is an income test. The enhanced BPA is gradually reduced on a straight-line basis for taxpayers with net incomes of more than $155,625 (the bottom of the fourth tax bracket for 2022) until it has been fully phased out once a taxpayer’s income is over $221,708 (the threshold for the top tax bracket in 2022). Taxpayers in the top bracket will still get the “old” BPA, indexed to inflation, which is $12,719 for 2022.
Government pension contributions
The Canada Pension Plan (CPP) rate for 2022 is 5.7 per cent (the Québec Pension Plan (QPP) rate is 6.15 per cent) with maximum contributions by employees and employers set at $3,499.80 ($3,766.10 for QPP) in 2022, based on the new yearly maximum pensionable earnings of $64,900 (with a $3,500 basic exemption.) Self-employed Canadians must contribute twice the amount, so their maximum CPP contribution for 2022 will be $6,999.60 ($7,552.20 for QPP), up from the 2021 amount of $6,332.90 ($6,855.80 for QPP).
The CPP hike is part of a multi-year plan approved by the provinces and the federal government five years ago to increase contributions and benefits over time.
EI premiums
Employment insurance premiums are also rising, with a contribution rate for employees of 1.58 per cent (1.2 per cent in Quebec) up to a maximum contribution of $952.74 ($723.60 in Quebec) on 2022 maximum insurable earnings of $60,300.
TFSA limit
The 2022 tax-free savings account (TFSA) contribution limit will remain at $6,000 for the fourth year in a row. That’s because the government in 2015 announced that, starting in 2016, the annual TFSA limit would be fixed at $5,000, indexed to inflation for each year after 2009, but rounded to the nearest $500. In other words, once the cumulative indexed annual TFSA contribution limit hits $6,250, it will jump to $6,500.
For 2022, that indexed contribution amount is $6,162.70, based on the 2.4-per-cent inflation factor above. But the limit for 2023 is expected to increase to $6,500, provided the 2023 indexation adjustment is at least 1.5 per cent.
The cumulative TFSA limit is now $81,500 for someone who has never contributed to a TFSA and has been a resident of Canada and at least 18 years of age since 2009.
RRSP dollar limit
The registered retirement savings plan (RRSP) dollar limit for 2022 is $29,210, up from $27,830 in 2021. Of course, the amount you can contribute to your RRSP is limited to 18 per cent of your 2021 earned income, which includes (self)employment and rental income, less any pension adjustments, up to the current annual dollar limit.
OAS
If you receive Old Age Security (OAS), the OAS repayment threshold is set at $81,761 for 2022, meaning your OAS will be reduced in 2022 if your taxable income is more than this amount, and is fully eliminated with taxable income over $133,141.
Working from home
Finally, a reminder that those of us who continue(d) to work from home in 2021 and 2022 will once again be able to take advantage of the temporary flat rate method, introduced for the 2020 tax year, to calculate home office expense deductions.
Under the temporary flat rate method, employees can simply claim $2 for each day they worked from home due to the pandemic. The government in December announced in its economic statement that it was increasing the maximum claim to $500 (from $400) for the 2021 and 2022 tax years.
For Maclean’s eighth annual chartstravaganza, we’ve once again asked dozens of economists and analysts to ponder the year to come, and choose one chart that will help shape Canada’s economy in 2022 and beyond, and explain this outlook in their own words.
This year, we’ve decided to release the charts over several days, making this more of a Chart Week than a one-day data binge. We also cover jobs and income, inflation, COVID, and energy.
How we’ll weather higher interest rates
Canadian households and housing markets can weather the interest rate increases the Bank of Canada is widely expected to deliver next year. At present, fewer than half of Canadian households have mortgages or home-equity lines of credit (HELOCs). About 75 per cent of existing mortgages are locked in at fixed rates, while the much smaller stock of HELOC balances carries floating rates. Scotiabank Economics expects holders of the most popular five-year term mortgages that renew in 2022 to see their rates increase by an average of 36 basis points (bps), which translates into about $50 a month in additional payments on the current average outstanding loan balance of $241K. Renewals in 2023 are forecast to see rate increases of about 45 bps, or around $65, in additional monthly payments. While no one wants to pay more on their mortgage, Canadian borrowers are set to absorb higher rates: under federally mandated stress tests, they had to show that they could cope with rates around 180 bps higher when they contracted mortgages nearly five years ago on larger principals.
New mortgages taken out during 2021 have been stress-tested against an even tougher standard: borrowers have had to show they could handle a 5.25 per cent interest rate, about 250 bps over five-year fixed rates and some 380 bps over variable rates on offer in December 2021. Although the share of variable-rate mortgages in new originations soared in 2021, they still account for only about one-quarter of all mortgage balances outstanding. Under most variable-rate terms, rising rates don’t trigger immediate increases in monthly payments; instead, amortizations are lengthened. Where higher interest rates do mean larger current debt-servicing costs, mortgages can generally be converted into fixed-rate loans.
Canadians are ready for a return to normal interest rates.
Inflation is behind home price growth—way behind
Canada’s housing bubble has grown into a massive problem for the Canadian financial system. House prices are much higher here than in most other countries, and levels of household debt incurred to keep up with the bubble are now a major risk.
One of the less well-known aspects of the bubble is its lack of upward pressure on inflation and the consumer price index, even as house prices have soared.
This chart shows that house prices in Toronto, Vancouver and nationally have grown about 4.25 to almost five times, with household debt keeping pace. That rate of increase is above seven per cent per year. Yet, the CPI measurement of housing costs known as “shelter” (shown in green with the arrow) has only inched ahead, growing by about 1.6 times. Most of the time that growth has been less than two per cent per year.
You might ask how this happened, especially since “shelter” is the largest weight component of CPI. Statistics Canada uses a monthly payments approach to measuring housing costs. The cost of buying a home is not included. A key part of the monthly cost of housing for owned accommodation is the mortgage payment, comprising principal repayment and interest. And interest rates have declined steadily over the last two decades, keeping the house-price bubble alive but holding the cost of shelter to a smaller gain.
The irony is that as the Bank of Canada increases interest rates, starting next year, house prices might drop, yet the CPI measurement of housing costs will grow, as the rate of interest is a significant weight in the calculation.
Housing construction will simmer down in 2021; will business step up?
Amid the many staggering economic statistics that emerged from the pandemic, this may be the most staggering: in the first three quarters of 2021, residential construction accounted for a larger share of Canadian GDP than did business investment. That has never happened before, not even close. In the 50 years prior to the pandemic, business investment was typically about twice as large a share of the economy as housing—a “normal” year would see about 12 per cent devoted to private capital spending and six per cent to residential construction. (Statistics Canada includes new homebuilding, renovation activity and real estate agent fees in the latter.)
The crossover in 2021 speaks to both (a) very weak business investment (tied with 1993 as the lowest on record), and (b) very strong housing activity (a record high share). Because all of these figures are stated in current or nominal terms, sizzling home prices played a role in the ballooning housing activity. But even in real or inflation-adjusted terms, housing’s share of activity would still rival the late 1980s for the strongest on record.
Looking ahead, housing is expected to simmer down from the 2021 extremes, and it was already easing from the early-year fireworks. The bigger question mark for the Canadian economy is whether business investment can now step up—we suspect it will, but look for only a moderate near-term recovery. Canada’s heavy dependence on housing doesn’t look to end anytime soon.
Stoking the home shopping spree
There has been a lot of focus on a lack of housing inventory, but little focus on the real issue—excess demand. When the Bank of Canada (BoC) cuts rates and uses quantitative easing, they’re looking to stimulate demand to raise inflation. The mechanism of lowering rates pulls consumers forward, to compete with existing buyers. Higher competition for the same lot of goods means more inflation.
That’s what’s happening with real estate. From April 2020 to October 2021, Canada saw about 246,500 excess home sales above the trend. In contrast, new listings came in higher, but just 85,800 homes above trend—far lower than the boost in home sales.
Separately, BMO estimates the annualized dollar value of excess home sales to be around $150 billion. It’s about the equivalent of six per cent of Canada’s GDP. That’s not total sales, it’s just the excess above the trend, stimulated by cheap credit. Keep in mind, this is happening with virtually no population growth.
The BoC stimulated demand to raise home sales and inflation, and now pretends it has no idea where it came from. Golly gee whiz, what a mystery.
Single-family homes are becoming precious commodities
The number of single-family homes listed for sale in major metropolitan areas across the country has fallen precipitously in recent years. In the Greater Toronto Area, listings have fallen 52 per cent compared to last year and are down a stunning 77 per cent from 2017 levels. In Vancouver, it’s a similar story, with inventory down by nearly one-third compared to last year and by over half since 2018.
While excess demand and speculation are no doubt contributing factors to this decline, the main driver appears to be a shortfall in new construction in the past decade at a time when population growth was exceptionally strong. From the 1970s until the 2000s, population growth averaged about 3.1 million per decade while new single-family completions averaged just under 1.3 million. But in the 10 years from 2010 to 2019, population growth surged to four million, while new completions fell to less than 1.1 million.
Until Canada figures out how to right this imbalance, we can expect single-family homes to be coveted assets in major markets across the country.
The Greater Toronto Area is one of the hottest regions in the Canadian housing market and has been for a long time. With so much attention from buyers and investors, the ever-pressing question is how the market will perform in the coming months and years.
Despite difficulties stemming from pandemic conditions in the past two years, price growth has stayed strong in the GTA, continuing its decades-long climb. Can we expect a continued fast pace of growth in house prices, or will things slow down? Will we see a large price correction in the coming years?
In this article, we will explore some of these questions and get a better idea of what the future may hold.
The current state of the GTA housing market
It should be no surprise to anyone paying attention that the housing market in the GTA is growing at a rapid pace. For over a year now, markets in the GTA have continuously reported record-breaking months and record-high house prices. At the same time, housing stock in the GTA has hit dismal lows. Today, the GTA is one of the most expensive of all Canadian housing markets.
Average prices in the GTA
In November of 2021, the average price across the GTA rose to $1,163,323, up from $955,889 at the same time last year. In terms of market activity, the region recorded over 9,000 home sales and only 10,036 new listings.
In this month, the price of single detached homes edged above $1.5 million, a 30% increase year over year. The semi-detached and condo segments saw average prices of $1,206,016 and $715,104 respectively. That means condos now in the GTA cost around the same that an average single-detached home did in 2014.
With sales up since this time last year but listings down, the GTA has remained firmly within seller's market territory and the Toronto Regional Real Estate Board (TRREB) is calling attention to "an inherent supply issue across all home types in the Greater Toronto Area."
Though home price appreciation continues in the GTA, price acceleration has begun to slow, indicating a cooling off from rapid price gains of mid-2020.
What might the future hold?
As indicated by the statistics above, there are a few things that are driving the real estate market in the GTA. Firstly, the area has a lot of economic momentum. Not only is it Canada's most populated region, but it’s also a hot spot for industry, business, and jobs. It sees huge amounts of yearly investment from both domestic and international sources, as well as steady population growth.
This can to some extent explain the high levels of housing demand in the GTA housing market. Simply put, people want to be where the action is. This is coupled with the fact that supply is so low in the city. In the past years, active supply in the market has dwindled, with homes being bought up about as fast as they can be put on the market, contributing to tight market conditions.
Demand can be reduced in a few ways. One major way would be to push buyers away from the housing market, while another would be to actually satisfy demand with a proportionate amount of housing supply. Unfortunately, even with large increases in housing seen in the GTA in the last year, it is unlikely to make enough of a dent to significantly impact housing affordability.
In terms of reducing demand, there is hope that an increase in interest rates could ease demand and slow price acceleration. In addition, upcoming regulations such as limiting foreign purchases and a vacancy tax are intended to help reduce demand as well. However, the actual effectiveness of these changes is contentious and remains to be seen.
With the forecasted end of pandemic conditions in 2022, other factors may keep demand high in the GTA, such as many people returning to work in the city, returning post-secondary students and increased immigration.
With more population growth and increasingly unfavourable detached homes, the condo segment, which has seen relatively slower increases in price, may see sales and values continue strong in the coming years.
Overall, opinions are mixed among economists and real estate professionals on what the future holds for the GTA and for Canada's housing market. In general, it seems the market will continue strong or steady through 2022, with the potential for a small price correction. Though given the recent increases in home prices, even a significant correction would only see prices return to the still high values of a few years prior.
In its recent Housing Market Outlook report, the Canada Mortgage and Housing Corporation predicted continued price growth through to 2023, though at slower rates than seen recently.
Buying or selling in the GTA today
In terms of buying, many are trying to get in now before an impending increase in interest rates makes large mortgages moderately less affordable. If you are waiting for lower prices before buying, however, you may be out of luck.
For sellers, you can be assured your house will sell easily, and for a good amount of money if you choose to list it. But should you? With property in the GTA being so hard to come by, and its years-long trend in appreciation, values in the market will likely remain strong for at least a few years to come. However, if you want to move your money elsewhere or buy in another city, you will find your money will go much further in other areas with better affordability.
It's predicted that Canada's home prices could soar next year thanks in part to pent-up demand and the median cost of a single-family house could reach more than $900,000.
According to the new Royal LePage Market Survey Forecast released on December 15, home values in Canada are expected to "rise strongly" in 2022 but at a slower pace compared to 2021.
The aggregate price of a home in Canada is set to go up 10.5% year-over-year to $859,700 next year.
Also, the median price of a single-family detached house is projected to increase 11% to $918,000 while the cost of a condo is predicted to rise by 8% to $594,000.
Royal LePage has cited pent-up demand from people who weren't able to buy a home in 2021 along with the "growing need" for more properties as the reasons for the increases.
It said that these factors put upward price pressure on the market that's already dealing with a supply shortage.
Locally, the greater areas of Toronto and Vancouver are expected to see the highest aggregate price increases at 11% and 10.5% respectively.
The Greater Toronto Area is the only region in Canada where condo price increases could overtake the rising costs of detached homes as the figure is forecast to go up by 12% year-over-year in 2022.
A report from the National Bank of Canada laid out how much money you need to be making to afford a house in cities across the country, with people in Toronto and Vancouver needing to earn over $200,000 annually and save for decades to get a house.
While it might not seem like it, a recent ranking actually found that Canada is one of the most affordable places in the world to buy a home.
After many months of home prices surging to never-before-seen highs, there’s no relief in sight for Toronto next year.
According to the new Housing Market Outlook from RE/MAX, home prices in the province’s capital are expected to rise another 10% in 2022. In larger markets like Toronto, the report says, there’s a chance that increased immigration next year will weigh on the already low supply levels and high home prices.
Interestingly, many of Ontario’s smaller markets are expected to have just as big, if not larger, price increases next year. Muskoka is projected to see prices rise by a whopping 20%; meanwhile, Thunder Bay and Collingwood/Georgian Bay are expected to have a 10% increase.
Durham, which saw a staggering 29% price increase year-over-year from 2020 to 2021, is projected to see a comparatively modest 7% increase in 2022. Brampton’s home prices, after a 25% year-over-year rise, are expected to go up 8% next year.
According to the report, inter-provincial migration will continue to be a key driver of housing activity in regions all across Canada.
“Less-dense cities and neighbourhoods offer buyers the prospect of greater affordability, along with liveability factors such as more space,” said Christopher Alexander, President of RE/MAX Canada. “In order for these regions to retain these appealing qualities and their relative market balance, housing supply needs to be added. Without more homes and in the face of rising demand, there’s potential for conditions in these regions to shift further.”
We knew it was coming. But it’s important and worth mentioning again. This week, Toronto City Council adopted new Zoning Bylaw Amendments that will remove most parking minimums across the city. We now join many other cities across North America who have done similar things in order to try and encourage more sustainable forms of mobility.
If you’d like to take a spin through the draft amendments, you’ll find them linked here. I haven’t gone through them in detail, but I did do a word search for “maximum” given that this week’s adoption represents a pretty clear change in perspective. Here’s an excerpt from the staff recommendation report that speaks to what I’m talking about:
Recognizing these challenges, this review of the parking standards in the city-wide Zoning By-law 569-2013 was guided by the principle that parking standards should allow only the maximum amount of automobile parking reasonably required for a given use and minimums should be avoided except where necessary to ensure equitable access. The previous review, which began in 2005, was guided by the principle that the zoning standards should require the minimum responsible amount of parking for a given land use. This is inconsistent with Official Plan policies which discourage auto dependence.
One other thing I found in the documents that went to Council was this map of parking spot selling prices in active high-rise developments across the city. Not surprisingly, downtown and midtown are showing the highest prices per parking space. I can’t vouch for the accuracy of all of these dots, but it looks directionally right and I can tell you that at least one of them is correct.
All of us in the industry know how much parking drives decision making. There’s a joke (half-joke) that when you’re designing a building, first you lay out the parking and then you design all of the residential suites around that structural grid. That’s not the way things should be done. The future of this city should not and cannot be centered around the car. This week’s adoption is in service of that.
Toronto home prices rose to a record as a sharp decline in the number of properties coming up for sale stoked competition among buyers, leaving little prospect the market will cool soon.
The average price of a home sold in the Toronto region in November was $1.16 million, up 22 per cent from last year. The number of new listings fell 13 per cent, according to data released Friday by the Toronto Regional Real Estate board.
Ultra-low mortgage rates, an open immigration policy and demand for larger living spaces in the pandemic have combined to created a homebuying frenzy that has made Canada one of the hottest housing markets in the world. Now, with the central bank signalling that interest rates could rise as early as April, buyers are finding incentives to try to get in the market now.
But there’s little to buy. There were about 6,100 active listings at the end of November — fewer than half the 13,800 on the market a year earlier.
The real estate board said that without policy measures, there won’t be enough new housing built to correct the supply-demand imbalance.
“Governments at all levels must take coordinated action to increase supply in the immediate term,” Kevin Crigger, president of the Toronto real estate board, said in a press release accompanying the data. “Unless governments work together to cut red tape, streamline the approval processes, and incentivize mid-density housing, ongoing housing affordability challenges will escalate.”
Though the cost of homes became an issue in the September election that returned Prime Minister Justin Trudeau to power, many of the levers that could increase the housing supply in Toronto and elsewhere lie with zoning and development rules controlled by local and provincial governments.
The drop in listings meant the total number of sales slipped 2.5 per cent on a seasonally adjusted basis from the month before. The average length of time a property stayed on the market was just 13 days. The data include the urban core of Toronto and its suburbs.
Sales of all types of ground-level homes registered fewer sales in November, but transactions for condominiums, which had gone out of favour last year after COVID-19 hit, surged 42 per cent as pickings among other property types grew slim and higher immigration flows bring the prospect of more potential tenants for units that are rented out.
Source: Bloomberg
The price of a new home in Canada increased on both a monthly and yearly basis during October as supply constraints persisted in some regions.
In its New Housing Price Index for October 2021, Statistics Canada reported that national new home prices grew by 0.9 per cent from September to October. This marks a slightly higher increase compared to the last four months, the federal department noted. On an annual basis, new home prices rose 11.5 per cent in October, a growth rate that has not been seen since 2006.
Out of the 27 census metropolitan areas (CMAs) analysed in the report, monthly prices increased in 15 of those communities, while 10 recorded no change and two CMAs saw prices drop. Year-to-year, prices were up in all 27 CMAs.
The price of a new home in Canada increased on both a monthly and yearly basis during October as supply constraints persisted in some regions.
In its New Housing Price Index for October 2021, Statistics Canada reported that national new home prices grew by 0.9 per cent from September to October. This marks a slightly higher increase compared to the last four months, the federal department noted. On an annual basis, new home prices rose 11.5 per cent in October, a growth rate that has not been seen since 2006.
Out of the 27 census metropolitan areas (CMAs) analysed in the report, monthly prices increased in 15 of those communities, while 10 recorded no change and two CMAs saw prices drop. Year-to-year, prices were up in all 27 CMAs.
Kitchener–Cambridge–Waterloo in southeastern Ontario experienced the largest increase in new home prices, where values jumped by 3.8 per cent month-to-month. According to data from the Kitchener Waterloo Association of Realtors, the benchmark price for all residential properties was $803,900, up 2.5 per cent from September.
Similarly, London, Ont. saw new home prices increase 2.4 per cent from September to October, with the London St. Thomas Association of Realtors reporting a 2.9 per cent rise in the benchmark price for all residential properties to $613,900.
Compared to the other 27 CMAs, Kitchener–Cambridge–Waterloo also reported the largest annual price gains, with the cost of a new home climbing 29.2 per cent year-to-year.
“Given the proximity of the two cities to Toronto, demand for homes has also been coming from buyers outside the London and Kitchener–Cambridge–Waterloo region, driving home prices further up in a market with persisting low supply, and creating a barrier for some local buyers,” explained the StatsCan report.
On the opposite side of the country, Victoria, B.C saw monthly new home prices jump 3.3 per cent, the largest increase on record since May 2002. Active listings in the city diminished “due to sustained demand.” In October, there were 1,036 homes available for sale, 7.8 per cent fewer than the previous month according to the Victoria Real Estate Board.
“If competition for homes continues in Victoria, upward price pressure should persist given the historically low supply,” said the report.
By province, new home prices in Ontario, British Columbia and Quebec were up 1.2 per cent, 1.1 per cent and 0.2 per cent month-to-month. Alberta, Nova Scotia, Prince Edward Island and Newfoundland and Labrador reported no changes in new home prices during October.
Major provincial cities such as Toronto, Ottawa, Vancouver and Montreal saw monthly new home prices grow 1.3 per cent, 0.5 per cent, one per cent and 0.2 per cent from September to October.
In Toronto, you're never very far from a crane. There are so many here — particularly because of the huge demand for new housing — that, in fact, we have more cranes than any other city on the continent, over 220 in the 416 alone. While our streets and our skylines are rapidly changing, there is always another raft of buildings waiting in line behind the scenes at City Hall for their approval. It can take years before the final approval, so here we look at a number of proposed new towers that may some day add to our growing urban canyons. Here's our list of the top 10 tallest towers that are still awaiting their judgement days.
Let's start our Top Ten at #14; 310 Front Street West. This mixed-use residential and office tower is currently under review after being submitted for Zoning By-Law Amendment (ZBA) in April of this year. If approved as planned, H&R REIT's Hariri Pontarini Architects-designed building would stand 69-storeys/235.5 metres tall, and become home to 560 units. The tower could also have a landmark feature of strobe lights shooting out from its top level into the sky, making it hard to miss. They're also the reason we snuck this one into our Top Ten list.
Now, into the actual Top Ten list, at #10; 372 Yonge. Designed by DIALOG for Yonge & Gerrard Partners Inc, Turbo-Mac Ltd, and Trimed Investments Inc, 372 Yonge was submitted to the City in July of 2020 for an Official Plan Amendment (OPA) and ZBA. The initial application was refused, but an updated proposal — located on the northwest corner of Yonge and Gerrard streets — was resubmitted, including for Site Plan Approval (SPA) in September. If approved, the building will stand 74-storeys/248 metres tall, and be home to a total of 415 residential units.
At #9 is 2180 Yonge. With multiple buildings designed variously by Pelli Clarke Pelli Architects, Hariri Pontarini Architects, and Adamson Associates for Oxford Properties Group, and CT REIT, 2180 Yonge was submitted to the City in December of 2020 for ZBA. The proposal includes five towers on the southwest corner of Yonge and Eglinton with a total of 2,701 residential units. The tallest building here is proposed at 70 storeys/253.5 metres.
At #8 is 475 Yonge. OPA and ZBA applications have been made to facilitate the redevelopment of the site for two BDP Quadrangle-designed towers for KingSett Capital. While the shorter 75-storey/246.4 metre tower would place at #11 this list, the taller 78-storey/255.25 metre tower on the northwest corner of Yonge and Wood streets puts the whole submission into the Top Ten. Documents were submitted in September and October of this year, and if approved, the towers would house 785 and 826 and residential units.
At #7 is 11 Bay. This proposed development — designed by Daoust Lestage Architecture and Hariri Pontarini Architects for QuadReal Property Group and Barney River — is to be an integrated 54-storey/269.45 metre office tower with retail and a conference facility, located at the prime intersection of Bay Street and Queens Quay. It is currently awaiting ZBA approval from the City, which was applied for in September of 2020.
At #6 is Chelsea Green. This site has ZBA approval, but awaits the Planning department's go-ahead on the SPA for the proposal. The tallest building here is an 86-storey/283.53 metre-tall condo designed by architects—Alliance for Great Eagle Holdings on the southwest corner of Gerrard Street West and Yonge Street. Along with residential use, other buildings on the site include a hotel, office space, and retail, while a new park is also proposed for part of the property.
At #5 is Union Centre. Designed by the renowned Bjarke Ingels Group for Westbank Corp and Allied Properties REIT, Union Centre had its OPA and ZBA applications approved by the City last month, but still awaits ratification by the OLT. Union Centre's SPA remains under review by the City. If built as planned, the building will stand 54-storeys/298.00 metres tall, and be home to 1.7 million ft² of office space at Simcoe and Station streets, and be topped by a terraced green roof.
At #4 is Union Park. Designed by Pelli Clarke Pelli Architects and Adamson Associates Architects for Oxford Properties Group, the developer applied for ZBA in August of 2019, and is still waiting on a decision from the City. If approved as proposed, the development would consist of four towers, two residential towers and two office towers, the tallest of which would be a 58-storey/303.26 metre-tall office tower. At over 300 metres, it would be considered a "supertall."
At #3 is the taller tower at Gehry Towers. Designed by the renowned Gehry Partners with Toronto's BDP Quadrangle, the project is being developed by Great Gulf, Dream Unlimited, and Westdale Properties. Originally proposed as Mirvish+Gehry by Projectcore, applications to the City for ZPA and SPA were submitted in 2012 and 2016, respectively. Changes meant that the ZBA was reapplied for in 2014, and that received approval. Further changes, however, meant another resubmission in 2018, and a revised version of it remains under review. A revised SPA also awaits approval. Once this development gets the go-ahead, the two towers would stand at 84 and 74-storeys (308 and 266.5 metres) on the block bordered by King, Pearl, Ed Mirvish Way and John Street, and house a respective 1170 and 868 residential units, with retail, office, and institutional space in the podiums. The taller building would be another supertall.
At #2 is 212 King Street West. It is a proposed 80-storey/311.8 metre mixed-use building designed by SHoP Architects for Dream Office REIT and Humbold Properties, on the northwest corner of King Street West and Simcoe Street in the heart of Downtown. The developers submitted applications for ZBA in December of 2020, and for SPA in June of this year. Both applications are currently under review. If approved as planned, the supertall building would house a total of 588 office and rental units.
Way up at the top at #1 is the incredibly skinny 1200 Bay. Designed by Swiss starchitects Herzog & de Meuron Architekten with Toronto architects BDP Quadrangle for ProWinko and Kroonenberg Group, this proposal is an 87-storey/324 metre mixed-use building that would house total of 332 residential suites across 71 floors, with 13 floors of office space and two floors of retail closer to ground level. A restaurant would sit up at the very top. Applied for in June of 2020, 1200 Bay awaits a decision from the City on its ZBA application.
A final note to add would be to include a building that is — unlike any of the other buildings in this list — actually already under construction. The One, an 85-storey mixed-use condo/hotel/retail tower on the southwest corner of Yonge and Bloor streets, is approved at 308.6 metres tall, and should be Toronto's and Canada's first building to achieve supertall status… but Mizrahi Developments have applied for approval to extend the height of this Foster + Partners and Core Architects designed building to 338.3 metres. Even with it belonging on a Top Ten Under Construction list, that potential extension to 94 storeys makes The One the actual #1 on this list too, bumping all the proposals on the list down by one.
Inflation in the Canadian economy has been on a steep increase since the start of 2021. Now as Canada begins to emerge from the COVID-19 pandemic, the hopes are for positive economic growth, however, it seems pandemic effects may stick around longer than most anticipated.
Pressure is now being put on the Bank of Canada to rein in rising inflation. The bank has held its position that high inflation is merely a "transitory" issue, though some are warning inflation may get worse before it gets much better.
What is the current inflation rate?
According to new figures from the CPI released this week, the current inflation rate in Canada reached a new high of 4.7% in October, in line with market expectations. While not the highest level in history, it’s the highest inflation rate Canada has seen since 2003 and is more than double the average pre-pandemic levels of about 2%.
This is up from about 1% at the start of the year and 4.1% in August. The U.S. has seen a similar spike in inflation, hitting above 6%. Central banks across the world are also reporting large growth in inflation.
What is the Consumer Price Index (CPI)?
The consumer price index is a means for measuring price increases in Canada and is the primary indicator used to determine inflation rates.
The CPI tracks the prices of eight major commodities in order to determine how the economy is inflating or deflating. Though various commodities may fluctuate in price, the broad selection of goods represents an average of Canadians' household spending.
Eight commodity prices tracked by the CPI
- Food
- Shelter
- Household operations, furnishing, and equipment
- Clothing and footwear
- Transportation
- Health and personal care
- Recreation, education, and reading
- Alcoholic beverages, tobacco products and recreational cannabis
Each of these commodities is weighted in terms of relative importance. The CPI measures costs and applies an index value, the rate at which the index changes is expressed as the inflation rate. Monthly increases are projected out to find a hypothetical yearly rate, however, the rate rarely stays the same for a whole year.
Canadian inflation history
The last time Canadian inflation ran wild was in the 1970s and 80s when inflation rose as high as 14%. At that time, inflation was caused by a perfect storm of global economic conditions and failed governmental economic stimulation. This period of inflation during a recessionary period was known as Stagflation. Eventually, inflation was brought under control due in part to increased interest rates, and it gradually reduced until hovering around 2% for many years.
At the start of the COVID-19 pandemic, inflation actually dipped low for a brief period. From about March to May 2020, the CPI saw very low or no increases as markets faltered in response to new restrictions. The price of gas along with rent prices decreased, and travel expenses fell sharply.
However, as it became clear that difficult times were here to stay for the near future, prices in food, gasoline, housing and more began to rise as the difficulties in production and supply chains increased. Since then inflation has continued to tick up steeply.
What inflation means for Canadians
There is some contention in the understanding of inflation and how it can affect Canadians. Some people actually see high inflation as possibly a good thing and a natural consequence of an unbalanced economy. They also point to positives such as the fact that inflated money makes paying off past debts even easier as the purchasing power of the dollar goes down.
On the other side of things are the arguments against inflation. These include the fact that as inflation goes up, uninvested savings actually decrease in value. This is of particular concern for the millions of Canadians approaching retirement age who are now seeing their funds dwindle.
There is also the fact that inflation is rising faster than wages. Prices are up all over and the labour force is starting to demand more compensation for their work, causing labour shortages in some areas. Overall, a less healthy and more unstable economy can lead to all sorts of turmoil both economically and socially.
What is the inflation forecast?
There is also much contention on how rising inflation will play out for Canada. Some forecast it as only a transitory adjustment that will subside, while others fear it’s a warning for things to come and a repeat of inflationary periods of the 1970s.
Recent inflation expectations predict that the CPI will rise above 5% by the end of the year, with multiple point increases still in the forecast in 2022. According to the Conference Board of Canada's Index of Business Confidence, a majority of businesses polled feel inflation rates will rise 2% or more in the next six months. The central bank however hopes for average rates of 3.4 percent for 2022, up from a previous forecast of 2.4%. They aim to reach the target inflation rate of 2% by 2023.
What can the central bank of Canada do?
All eyes are now on the Bank of Canada as inflation rises. During the pandemic, the Bank of Canada cut their policy rate to record low levels in order to ensure the flow of money continued through the economy. They have committed to holding off until at least the second quarter of next year until they raise rates, and expect rising inflation to be a temporary issue.
Should they be wrong and inflation gets too out of control, they may be forced to announce an early interest rate hike, or a faster pace of increases, in order to combat inflation.
Bank ends Quantitative easing
Another means by which the bank has influenced the rate of inflation is through its quantitative easing program. Under this program, the bank bought up mass amounts of government bonds, causing their prices to surge and their yields to drop, thus lowering related rates such as fixed mortgage rates. Late last month, the bank opted to ease down this program, and many are saying this is a sign of increased interest rates to come.
Toronto's hot real estate market isn't showing any signs of cooling and a new report explains why.
As we have seen from numerous real estate reports, home prices continue to skyrocket across Canada. Some believe Toronto's bloated housing market is on the verge of popping, but not until mortgage rates increase and discourage future foreign real estate investments.
A new report shows that the city's home prices continue to rise and why they aren't dropping just yet.
"Those hoping for a slow-down in the Toronto area's housing market will need to wait a bit longer — all indicators from the past month's data for October 2021 are showing a market that is actually heating up rather than cooling down," reads the latest Move Smartly report from John Pasalis, president of the real estate brokerage Realosophy Realty.
There are fewer homes on the market. At the end of October, the Toronto area had only 3,687 houses available for sale, a 56 per cent decline from inventory levels last year and well below the roughly 12,000 active house listings that are more typical for the month of October, the report notes.
"Toronto's housing market continues to be a market where demand significantly exceeds the supply of homes coming on the market for sale," Pasalis says.
But he argues the strong demand today is different from the housing demand last year at this time in the first year of the pandemic.
"This time last year, the strong demand was largely driven by a surge in home buyers entering the market," he says in the report. "This year, the surge in demand is coming from investors rather than end users."
In fact, house sales were down 18 per cent on a year-over-year basis in October, but still above pre-COVID 19 pandemic levels for October in 2018 and 2019.
The average price for a house in October was $1,445,088, up 28 per cent over last year; the median house price in October was $1,265,000, up 33 per cent over last year.
Condo prices are also on the rise.
The average price for a condo in October reached $730,726, up 15 per cent over last year; the median price for a condo in October was $660,000 up 15 per cent over last year.
So when will Toronto see a decrease in home prices?
While many people suggest that an increase in mortgage interest rates will lead to a price drop, Pasalis suggests this is unlikely in the short-term. Many homeowners have fixed, five-year mortgages so the change in rates won't have an immediate impact.
So, if you are looking to buy a home, you may want to hold off a bit. Looking to sell? Don't wait too long.
"If we see a lot of demand come out of the market and more homes listed for sale, our market will start to slow down, but will continue to remain in seller's market territory, with prices growing at a more modest rate than we are seeing now," the report states.