Most of us looking for shelter in this swiftly changing market have come to accept the fact that single family homes have become largely unaffordable in most large Canadian cities, Toronto included.
So what’s a family to do? Go live with their parents? Er, maybe as a last resort.
For those hoping for housing in 2017, trends identified in a recent 100-page report offer food for thought. The Urban Land Institute (in partnership with PricewaterhouseCoopers) analyzed nearly 250 surveys and 90 interviews with housing industry leaders. And the good word on the street? The year ahead won’t be as tough as last year in this crazy Toronto real estate market.
We’ve boiled down the report into six need-to-know points:
1. Starter home = condo
We’ll see more families finding their footing in condos. The report authors see an opportunity for “the condominium and rental markets to reach those priced out of home ownership.”
Those who prefer a ground-level footprint over a high-rise should take note of this trend: “For potential buyers unable to afford a house but not sold on condo living, there is an increased push for mid-density development and stacked townhouses, especially in infill projects in Toronto.”
2. Into the suburbs
We’ll see single-family home buyers living farther from city centres. Both price and availability play into this equation, with Toronto’s urban land use policies favouring high-density development over detached housing.
3. 2017: a year of stability
We’ll see the market balance out. Average house prices are expected to increase by 4.6 per cent, a far cry from last year, which saw average property prices in Toronto rising by approximately 15.5 per cent over the course of 2016, reported the Toronto Dominion Bank.
3. Millennials and boomers: both renting, but for entirely different reasons
We’ll see millennials shying away from home ownership, with price and lifestyle preferences both driving factors. In addition, rising city populations and a trend towards downsizing will have Baby Boomers selling off empty nests, creating demand for “larger luxury units targeted to their space expectations,” the study says.
5. Developers building more affordable rental units
We’ll see more inclusionary zoning. Gaining traction and driving rental developments, the authors call this concept an “old idea that has roared back to life.” The creation of below-market-rent housing in conjunction with and as a condition of new developments is a trend expected to continue through this year and beyond, according to the report.
6. A new trend: optionality
We’ll see optionality, which allows tenants and landlords to work together to determine how a space might be used. “Optionality from a user standpoint allows for the adjustment of space needs to vary in terms of size, location, and use on an as-needed basis,” the report says.
Plus, watch for cool innovations in real-estate-related technology, which could result in more swift, accurate and transparent real estate transactions in the coming year.