Why are house prices going so high?

Comparing the inventory today to that of 10 years ago is sobering.

The lack of inventory – often cited as a reason for skyrocketing prices – hit a very real and, perhaps concerning, low last month.

That has one association calling the situation a crisis

“February data demonstrates, quite clearly, that our housing supply crisis in the GTA is getting worse,” BILD President and CEO Bryan Tuckey said. “Our members are building to current provincial intensification policy and we are building less low-rise single-family housing and more high and mid-rise housing but consumer demand for low-rise homes has not dropped.

“Today in the GTA we have a scarcity of single-family ground-related housing that is not just unprecedented – it is almost inconceivable,” Tuckey continued. “As a result we are seeing record breaking condo sales and continued price growth.”

Indeed, across the GTA, a mere 1,001 new low-rise homes were available in February. And there were only 324 new detached homes available.

10 years ago there were 17,304 low-rise homes and 12,064 detached homes available.

Let’s let that one sink in for a second.

“If I were shopping for a single-family home ten years ago, I would have been able to choose from among 500 different sites and nearly 18,000 units,” Patricia Arsenault, Altus Group’s EVP of research consulting services said. “Today, there are less than 100 projects with any available units to purchase, totalling only about 1,000 units. And I would have to act very quickly to get one of those.”

The reality, though, is that there is dwindling land available to build low rise homes within Toronto {and some surrounding areas.}

Another issue, according to BILD, is legislative roadblocks.

“While the February results point to a trend decades in the making, the severity of the monthly figures, is jarring,” Tuckey said. “As the current data demonstrates, legislative guidelines and planning policies have real impacts on real people. With significant declines in builder inventory and record prices (for both low and high-rise homes), the GTA housing market is in crisis and it is time for governments to work with us to address the problems.”

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