On January 31, TREB held an Economic Summit at Toronto's Parkview Manor. The event served as the official release of TREB's Market Year in Review & Outlook Report 2017 and helped to further the conversation on the report, including this year's central theme of "Connecting to Affordability."
President and CEO Remarks
Kicking off the event were TREB CEO John DiMichele and TREB President Larry Cerqua. DiMichele pointed out that both this year's report and the Economic Summit are meant to provide a deeper understanding of the housing market as well as some of the policy issues impacting housing affordability along with possible solutions, noting that lack of housing supply is critical to today's growing affordability problem. He also pointed out that while transportation infrastructure can help improve housing affordability, not enough people are willing to trade in their car keys for public transit. He noted that both issues – transit and housing supply – require creative and innovative solutions through collaborative efforts by the public, private, and not-for-profit sectors.
Cerqua pointed out how useful the report is to REALTORS® in assisting their clients in achieving the dream of home ownership or in facilitating business transactions. He noted that the report provides critical intelligence on today's market that REALTORS® can share with their clients, distilling complex information into easily digestible language as well as providing a snapshot of recent and intending home buyers to give REALTORS® a better understanding of who their clients are, or might be, as well as what they want.
Price Growth & Short Listing Supply to Make Headlines in 2017
On hand to present for this discussion were Jason Mercer, TREB's Director of Market Analysis; Sean Simpson, Vice President at Ipsos Public Affairs; and Matthew Boukall, Senior Director, Residential Products, Altus Data Solutions.
First, Jason Mercer presented a brief overview of the market conditions we saw in 2016 before turning to a discussion of what to expect for the GTA market in 2017. He noted that 2016 was the second consecutive record year for home sales in the GTA and highlighted that strong rates of price growth and a short supply of listings would continue to make headlines in 2017. Mercer pointed out that we would not see relief in terms of price growth until solutions to the ongoing pressure on listing supply were implemented and recommended that the public, private and not-for-profit sectors should come together to focus on supply-side solutions.
Jason was joined onstage by Sean Simpson, who presented the results from Ipsos surveys on consumer buying intentions as well as on foreign buying activity. In terms of consumer buying intentions, it was pointed out that 53% of demand for ownership housing in the GTA would come from first-time buyers, while, in terms of foreign buying activity, Simpson pointed out that only 4.9% of transactions where TREB Members acted on behalf of buyers involved a foreign purchaser.
Next, Matthew Boukall took some time explaining trends in the new homes and residential land sectors. On the residential new homes side, noting that 2016 was a record year for high-rise sales, Boukall pointed that low-rise sales fell back again in 2016. Boukall also pointed out that low inventories were a key factor in an upward price trend seen throughout the new homes market and noted that, especially in the low-rise sector, low inventories would contribute to further price increases in 2017. The residential land sector also saw another record year for sales, with most areas of the GTA posting increases, and the increase in sales driven mostly by high density land.
Transportation & Affordability
The next segment of the event examined transportation infrastructure in the Greater Golden Horseshoe. First up to discuss the GTA Transportation Network was Metrolinx President & CEO, Bruce McCuaig. McCuaig shared Metrolinx's plans to improve transportation infrastructure and the way we live, work, and play throughout the GTA and the Greater Golden Horseshoe more broadly speaking.
Next up, was Paul Smetanin, President & CEO of the Canadian Centre for Economic Analysis (CANCEA). Smetanin shared the results of a TREB-commissioned study on the impact of transportation infrastructure on housing affordability. The study found that increased transportation infrastructure as a result of the Metrolinx Regional Express Rail (RER) would have positive effects on affordability and would also contribute to price premiums of up to 12%. The key determinant on improved transportation infrastructure's improving affordability was mode shift, i.e., whether or not people switched from driving to taking public transit in their daily commute.
Housing Supply Panel
Continuing the conversation on affordability was our housing supply panel, consisting of representatives from the public, private, and not-for-profit sectors and moderated by RealStrategies Inc. President George Carras. The panel consisted of Brian Lewis, Provincial Chief Economist & Assistant Deputy Finance Minister; Jeremy Kronick, Senior Policy Analyst, C.D. Howe Institute; Sean Speer, Munk Senior Fellow, Macdonald-Laurier Institute; Marcy Burchfield, Executive Director, Neptis Foundation; and Bryan Tuckey, President & CEO, Building Industry & Land Development Association (BILD).
The panel discussed several issues including whether or not there is a housing supply crisis in the GTA, defining what the crisis consists of, and also possible solutions. Overall, the panel concluded that there is a supply crisis in the GTA and that innovative and collaborative solutions by the public, private, and not-for-profit sectors are required to address it.
Keynote Address
In keeping with the transportation narrative, our keynote address was delivered by Ontario's Minister of Transportation, the Honourable Steven Del Duca. Del Duca highlighted the government's plans to improve transportation infrastructure in the province, while mentioning specific improvements for the GTA, including the Eglinton Crosstown line.
Stay tuned for a video highlight reel, capturing the essence of each presentation. The reel will be made available to Members via Stratus in the coming weeks.
Download the Report
The Market Year in Review & Outlook Report 2017 is now available for download.
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- Click here for a desktop-friendly version.