Toronto housing prices on the up amid tightening supply

Demand continues to outpace a dwindling supply of listings

TORONTO’S home prices extended gains in November, and are now accelerating at the fastest annual pace since 2017 as demand continues to outpace a dwindling supply of listings.

Benchmark prices on homes sold in Canada’s biggest city rose 0.6 per cent in November from October, bringing the increase from a year earlier to 6.8 per cent, the Toronto Real Estate Board (TREB) said in a report on Wednesday.

The number of transactions also rose, with sales up 14 per cent from November 2018.
Toronto’s housing market began bouncing back in recent months – driven by a combination of lower mortgage rates and rising population – after almost two years of adjustment to higher taxes and tighter regulations to tame soaring valuations.

While transactions still remain well below records in 2016, when the market was being driven by speculative demand, prices have fully recouped their declines and realtors are cautioning that values could continue rising, given the dearth of listings and supply.

Active listings fell 27 per cent in November from a year earlier, said TREB.

Jason Mercer, the board’s chief market analyst, said in the statement: “Increased competition between buyers has resulted in an acceleration in price growth.

“We expect the rate of price growth to increase further if we see no relief on the listings-supply front.”

Condos have been recording the biggest increases over the past year, with benchmark prices for such homes up 9.5 per cent from a year ago, versus 5.1 per cent gains for single-family detached residences.

The average price of a detached home sold in Toronto last month was C$1.04 million (S$1.07 million), versus C$617,658 for condominiums.

The average price of a home in Toronto and its suburbs rose 7.1 per cent from a year earlier to C$843,637 in November.

That’s still below the peak of nearly C$921,000 set in April 2017, as activity over the past couple of years has shifted to the less-pricey condo segment of the market. BLOOMBERG
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Can Canada Keep up With The Price Of It’s Real Estate Market?

New research from the RBC’s housing affordability report shows that only a small fraction of families in Canada can afford to buy an average-priced home.

As it stands, only 20% of families in Toronto can afford to buy a home currently, and this statistic does not include taking a mortgage stress test!

Aside from the obvious high pricing in Toronto & Vancouver, RBC’s graph indicates how prices have risen above affordability all throughout Canada.

The good news is that RBC’s affordability measure has declined for two straight quarters, meaning housing is slowly becoming more affordable. The west parts of Atlantic Canada are declining in price, and household incomes are rising, causing the bar to lower for ownership in most markets.

In Canada – it now takes 51.4% of an average household to cover the costs of an average priced home, down from 53.9% six months prior. In Toronto, the ratio fell to 66% from 75.3 within a 6 month period.

At this pace, Toronto’s housing slowdown would have to last another 4 years before the city becomes affordable. RBC economists concluded “Interest rates are no longer poised to increase amid heightened global trade uncertainty. And despite signs of a cyclical market bottom emerging this spring, we expect home prices to remain under downward pressure for months to come in many western Canadian markets”.

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Airbnb will Start “Designing” Houses in 2019

Airbnb’s founders are launching a new initiative called Backyard, “an endeavour to design and prototype new ways of building and sharing homes” says chief product office and cofounder Joe Gebbia.

 

 

 

 

 

After successfully creating a global network of more than 5 million homes, castles and treehouses for rent, their business is worth an estimated $38 billion! The goal is to become not just the company that provides the housing but the company that provides the houses.

The first wave of test units will be going public in 2019. Small prefabricated dwellings could be in the roadmap, but so are green building materials, standalone houses, and multi-unit complexes. Gebbia says there is a moral imperative to ensure that new homes are designed well, with a small environmental footprint. The spaces will be designed to be shared, from the ground up. It means creating spaces that evolve and reconfigure to the occupant’s changing needs (Think walk in-closets that expand out of flat walls, and beds that can drop down from the ceiling on a whim).

Gebbia says “It’s too early to say,” how much a Backyard house will cost, but based on his comments and the looks of Airbnb’s models, it seems likely that Backyard will be a housing system that can be tailored to particular contexts rather than one, perfect, prefabricated home. And you don’t need an Airbnb host to buy into the initiative. Their goal is to see Backyard get as big as Airbnb itself.

 

For more on this article, check out the link source below:

https://www.fastcompany.com/90271599/exclusive-airbnb-will-start-designing-houses-in-2019