Ben Myers of Bullpen Research & Consulting was recently interviewed by Newinhomes.com about the state of Toronto’s new housing market. Ben is always interesting. And these are the sorts of things that I read in my spare time. So here’s an excerpt:
The average price of popular new condo floor plans in the City of Toronto in October 2019 was approximately $1,275 per-square-foot (psf) and with growth of 3% a year, prices would hit $1,475 psf in 2024. I wouldn’t be surprised to see annual average growth of 4%, which would get you to $1,625 psf in five years in Toronto.
This data was taken from BuzzBuzzHome and — by “popular new condo floor plans” — I believe he means that these are the floor plans that buyers tend to click on and review when they visit the site. So it’s a good indication of buyer demand.
Here’s another quote that stuck out:
Part of the reason that price growth has spiked is a rise in construction costs, development charges, and land prices – this cost-push inflation is passed on to consumers.
That sounds right. And I have been writing about this phenomenon all year. Most of us can probably remember when $1,000+ psf was a high water mark for new construction condos. Now it’s pretty much a floor.
I wonder how much of this cost could be alleviated by things like:
– Modular construction in off-site factories. This 24/7 solution,involving barges and large flat-bed trucks to move pre-fabricated sections on site and assembling them in Lego fashion, saves lots of time and money, but how much?
– Land Value Taxes instead of the current Land/Building property tax. By untaxing buildings and taxing land commensurately, buildings could be built to highest and best use, and land speculation and hoarding would greatly diminish.
– Zoning changes. This YIMBY approach should be obvious by now.