People in Toronto find it difficult to get houses. As simple and sarcastic as it may sound, that is the truth. The discussion here is not about the availability of houses (which up until recently, it was), rather, it is about whether the properties available are affordable or not.
Till a few days ago, whiny industrialists everywhere were cribbing about the wide gap in supply and demand and how the government needs to formulate better policies to help stimulate real estate growth. But ever since the revelations in the recent census data have come to light, one thing is abundantly clear. It is not about the supply. Not at all.
For the census data released piece-wise translates into the fact that there is no shortage. Instead, new houses built exceeded the generic demand by almost 30,000 units over the specified period. So, the product was there. Which begs the question, what went wrong? Some of this disparity between required and available housing is definitely due to the construction plummet during the recent economic stagnation. But there are other prominent reasons as well.
At the root of it, there are two things:
- Due to increasing population and population density, there is a scarcity of land to build new properties on. Even more so, if the demand for stand-alone units soars high. And it does. Everyone wants to have their own piece of paradise with surrounding greenery. But Toronto being one of the major metropolitan centers in Canada, makes it almost impossible to carve out a piece of dirt anywhere below the million dollar mark.
- The speculation is the worst factor. Unrealistic drive in price rise has raised the cost of owning a property to such an extent that a major demographic sector just can’t think of buying their own turf. There is an overflow of these so-called, young adults, living with their parents who are at the edge of becoming home-owners if only the price tags were a bit more accommodating.
Now, the market should eventually come back to balance. But if the speculation game goes on as it is, prices are going to continuously skyrocket without any chance of a pent up. Add to that, the declining percentage of single stand-alone housing and there seems to be trouble ahead for sure. The city is facing a shortage of acreage to build the properties on and it is proving very hard to find a solution to it. Only realtors like Real Estate Agent Toronto can help to ease it up a bit.
Therefore, if the prices were to drop a bit, many of those from the young adult section would love to get out and have a place of their own. But for that, there is a need for some semblance of structured control and discipline on the part of those who must restrain their imagination from propelling prices even further up. This will definitely help to provide an opportunity to those millennials and working professionals who till now, are under pressure to defer starting a family and delaying ownership due to this real estate price boom. After all, the city was the destination for young couples and families in the past, even if the situation has been less than desirable for some time now.
Young people are the ideal demographic and are the prime factors for boosting growth. Realtors would definitely want to dip their fingers in this cash flow if they adjust their financial ratings just a little bit. Therefore, policies needed to help maximize this profitable segment must be formulated at the earliest so as to open the floodgates and let the reaping begin.