Why does the price of homes in the GTA keep rising?
Pricing for new homes remains high because we have a housing shortage and there is strong demand.
The Greater Toronto Area is one of the most desirable metropolitan areas in North America and is expected to continue to grow by approximately 115,000 people per year. It is forecast to reach approximately 9.7 million people by 2041.
That expected growth, combined with strong demand, a shortage of supply and an existing housing gap due to not enough homes being built to meet the demand over the past decade, has led to the increase in housing prices. When measured against the provincial forecast in the Provincial Growth Plan for the Greater Golden Horseshoe, the GTA is approximately 100,000 units short of forecasted need between 2006 and 2018.
The housing supply challenge in the GTA has been 15 years in the making and it will take years to solve given the time it takes to bring new housing projects to market.
It is important to note that in 2018, single-family house prices across the GTA generally stabilized or decreased slightly compared to the previous few years with the exception of new condominium prices, which increased in 2018 due to strong demand. Generally, this is because condominiums represent a more affordable housing option compared to traditional single-family homes. Population growth and the strong Canadian economy will continue to put pressure on housing costs in the future, which is why it’s so important to ensure there is an ample housing supply.