With supply at all-time low, housing to only become increasingly more unaffordable in 2022

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 Premier Doug Ford and Minister Steve Clark met with municipal leaders from across Ontario on Wednesday to address the housing crisis and discuss ways in which the province can increase supply.  

 

Housing supply in Canada is at an all-time low.

Per the Canadian Real Estate Association (CREA), prospective buyers across the country are facing a record shortage of listings to start 2022, and prices are only going to go up. 

“There are currently fewer properties listed for sale in Canada than at any point on record,” said Shaun Cathcart, CREA’s senior economist. “So unfortunately, the housing affordability problem facing the country is likely to get worse before it gets better.”

The national average home price was $713,500 in December 2021, up 17.7 per cent from the same month last year. 

In Niagara, the median sale price for single detached homes rose 27.3 per cent on a year-over-year basis to a record $700,000 in the fourth quarter of 2021.

According to Cathcart, there’s really only one way to deal with soaring prices and meet demand: create more supply. 

“Policymakers are starting to say the right things, but now they have to act to change this course we’re on,” said Cathcart. “An aggressive national push to build more homes is what will address the issue, but it will probably have to be a greater amount of building than anything we’ve ever undertaken. A touch over the status quo won’t cut it.”

At the federal level, while the Trudeau Liberals have discussed increasing supply, they have been almost exclusively focused on creating affordable housing – building heavily subsidized units for the homeless and vulnerable communities – as opposed to tackling housing affordability for average Canadians. 

In fact, instead of trying to increase the general housing supply, the Trudeau Liberals appear to be angling toward implementing some kind of equity or capital gains tax on the sale of one’s principal residence to address affordability; something that Ontario Real Estate Association (OREA) CEO Tim Hudak recently said will only “add yet another barrier to Canadians putting their home up for sale, further restricting housing supply.”

At the provincial level, the Ford government appears to be taking more concrete steps toward actually addressing the root of the problem and enabling the construction of more homes. 

On Wednesday, Premier Ford and Minister of Municipal Affairs and Housing Steve Clark held a summit with Ontario’s big city mayors and regional chairs – including Mayor of St. Catharines Walter Sendzik and Chair of Niagara Regional Council Jim Bradley – to discuss affordability and coordinate efforts to increase the supply of homes across the province. 

The virtual summit provided provincial-municipal leaders with an opportunity to share best practices, identify persistent issues, and collaborate on ways to build the right mix of housing.

“Young families, seniors and all hardworking Ontarians are desperate for housing that meets their needs and budget,” the premier said in a statement after the conference. “At a time when our province is growing, our government will continue to use every tool we have to help municipalities get more homes built faster to help more families realize the dream of home ownership.”

During the discussion, Premier Ford and Minister Clark announced more than $45 million in funding to help Ontario’s 39 largest municipalities cut red tape and modernize, streamline, and accelerate processes for managing and approving housing applications.

“After a decade of mismanagement and inaction under the previous government, the housing crisis in Ontario will not be solved overnight or in one meeting – addressing housing supply is a long-term strategy that requires long-term commitment, collaboration, and coordination,” said Minister Clark following the meeting.

“[Wednesday’s] summit was an important next step to identify what additional measures we can take to increase the supply of housing… As we continue this dialogue, our government will ensure municipalities have the tools and resources they need to unlock housing in every community across Ontario.”

At the summit the province also committed to working with the municipal sector to develop a data standard for planning and development applications to help accelerate approval timelines. 

To be built in partnership with municipalities, standardization will help improve data quality, create consistency across systems, make it easier to measure results, reduce costs for business and governments, and support municipalities’ transition to digital service delivery and digital approvals.

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