All-time low inventory driving up house prices, reducing affordability for buyers
Half of Ontarians in the market to buy a home in the next two years say they are looking for a detached house, up 13 points from a year ago, shows new research from the Ontario Real Estate Association (OREA). In Toronto, where supply of detached homes is at an all-time low, the demand is up 21 points from a year ago, with 50% of buyers saying they are likely to buy this housing type, according to the Ontario Home Ownership Index, OREA’s semi-annual consumer study conducted by Ipsos Reid.
“With limited supply of this housing type, it’s becoming increasingly difficult to meet the demand,” said Tim Hudak, OREA CEO. “Young families looking for more space, a backyard to play with their kids in, simply don’t have enough options to choose from. Increasing the supply of single-family detached houses, as well as semis and townhouses, will give buyers more choice at affordable levels.”
The Building Industry and Land Development Association (BILD) recently reported that housing supply has plummeted over the past decade. The lack of housing supply is a key driving factor for increasing prices of new single-family detached houses and high-rise condos in the GTA.
“Demand for detached houses is up while supply is critically low — no wonder prices are rising so quickly,” said Hudak. “We need more homes on the market; government should give careful consideration to policies that will increase supply. Home ownership is not a fad — it is the Canadian dream.”
According to OREA’s Ontario Home Ownership Index, eight out of ten Ontarians consistently say that home ownership is important to them (79%), real estate is a good investment (82%) and it makes more sense to own rather than rent (81%). ‘Long-term investment value’ is Ontarians’ top reason for buying a home (34%).
|Housing Types – Ontario compared to Toronto|
|Types of homes Ontario and Toronto buyers say they are likely to purchase in the next two years|
|Ontarians say:||Torontonians say:|
|50% – likely to buy a detached house in the next two years, up 13 points from a year ago||50% – likely to buy a detached house, up 21% from a year ago|
|19% – likely to buy a condo in the next two years, down 7 points from a year ago||22% – likely to buy a condo, down 17% from a year ago|
|19% – likely to buy a semi-detached home, up 4 points from a year ago||23% – likely to buy a semi-detached home, up 3 points|
|14% – likely to buy a townhome, down 2 points from a year ago||22% – likely to buy a townhome, up 2 points|
These are some of the findings of an Ipsos poll conducted between October 27 and 31, 2016, on behalf of the Ontario Real Estate Association (OREA). For this survey, a sample of 1,003 Ontarians from Ipsos’ online panel was interviewed online. Weighting was then employed to balance demographics to ensure that the sample’s composition reflects that of the adult population according to Census data and to provide results intended to approximate the sample universe. The precision of Ipsos online polls is measured using a credibility interval. In this case, the poll is accurate to within +/ – 3.5 percentage points, 19 times out of 20, had all Ontario adults been polled. The credibility interval will be wider among subsets of the population. All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error, and measurement error.
About The Ontario Home Ownership Index
The Ontario Home Ownership Index is designed to reflect Ontarians’ overall views of the residential real estate market in Ontario, and incorporates measures such as Ontarians’ perceptions of whether the market in their neighbourhood, city, and Ontario, respectively, have improved or worsened in the last year and looking ahead into the future, whether home ownership is important to them and whether it is a good investment in the long-term. The first wave of the index, conducted in the fall 2013, was set to a baseline of 100 points.
About the Ontario Real Estate Association
The Ontario Real Estate Association represents 67,800 brokers and salespeople who are members of the 40 real estate boards throughout the province. OREA serves its REALTOR members through a wide variety of professional publications, educational programs, advocacy, and other services. www.OREA.com