Detached homes are becoming so “precious” as the GTA continues to surge skyward, it’s going to become increasingly difficult for families to find, let afford, the Holy Grail of housing — a place that isn’t attached to the neighbour’s.
Demand is so strong for that shrinking share of the region’s housing stock, that sales of detached homes jumped 22 per cent across the GTA in April. The strong sales of those higher-priced homes helped push up the average price of homes (including condos, semis and detached) to $517,556 across the region — some 8.5 per cent higher than April of 2011, according to statistics from the Toronto Real Estate Board (TREB.)
“The single family detached home is the most precious — they are always going to be the bonus houses,” especially given the limited supply in Toronto and the fact condos continue to far outpace new home construction across the GTA, says realtor and board president Richard Silver.
A strong supply of new units coming on the condo market kept annual price growth to an average of 4 per cent, according to TREB statistics. But the continuing low inventory of houses for sale, and strong demand for higher-priced detached homes in particular, resulted in a 9 per cent price increase in April over a year earlier.
Detached homes sold for an average of $831,214 the 416 region in April, compared to $579,278 in the 905 regions.
Condo prices averaged $360,807 in the 416 region in April, up just 3 per cent from a year earlier, compared to a 7 per cent jump, to $289,819, in the 905 regions.
The statistics show the impact of provincial greenbelt policies that, while effective in drastically reducing costly sprawl, have seen the housing market shift dramatically over just the last decade, says George Carras, president of RealNet Canada Inc. which tracks all new housing construction across the GTA.
The explosion of condo development has actually seen the proportion of detached homes across the GTA slip to 59 per cent as of 2006 from 69.4 per cent of the total housing stock in 1991. And that number is expected to have dropped considerably when the 2011 census figures on housing are eventually made public because so much condo construction has happened in the last six years, far outstripping the creation of low-rise housing, says Jason Mercer, senior market analyst for TREB.
Just one new house is being built for every three condos now — it used to be one condo to every three houses just a decade ago — and that dwindling supply of homes, in the face of increasing immigration and demand, is contributing significantly to price escalations for low-rise homes, says Carras.
At the same time, at least one study has shown that just 20 per cent of Baby Boomers, the first wave of whom are nearing retirement age, have any intention of downsizing and putting their homes up for sale, he adds.
“Baby boomers are becoming a major force in this market. The majority of (detached) homes are owned by a demographic that really doesn’t want to move, which is causing a bit of a supply shortage.”
Veteran ReMax realtor Tom Cook said he’s seeing another issue contributing to the shortage of house listings: Homeowners who bought in the last decade but have seen their incomes lag well behind house price escalations.
While their homes may be worth far more on paper, at least, than a decade ago, they haven’t had the added income to pay down the mortgage, which means they can’t afford to list and move up.