Rachelle Younglai's recent piece in the Globe and Mail does a great job summarizing Canada's COVID-19 housing boom. The title of the article is, "How Canada's real estate market defied expectations in the COVID-19 pandemic."
Non-mortgage debt is down. Mortgage debt is up. Money is cheap. And people are clamoring for drivable vacation homes. Average home prices in places like Prince Edward County and the Kawartha Lakes (both outside of Toronto) are up ~30% from Jan 2020 to Jan 2021.
But after I sent this article around this morning, I was reminded that this is a good summary of what has just happened. It, for the most part, does not speak to what might happen going forward.
None of us can travel anywhere. We're stuck at home. And immigration volumes last year were down some 48% in Toronto, 43% in Vancouver, 40% in Montreal, and 46% in Calgary. The Toronto region went from about 120,000 new permanent residents in 2019 to about half that last year.
The behaviors and market outcomes that we have seen over the last 12 months, therefore, make intuitive sense. But how about the next 12 months or the next 5 years? I would prefer to use this latter time period for decision making right now.
Chart: The Globe and Mail
Proptech Collective has just published their inaugural 2021 Proptech in Canada report. Here are a couple of screen grabs that you all might find interesting:
This week, RBC Economics published a study on Canada's rental market where they argued that the pace of new supply needs to at least double in markets like Toronto in order to meet future housing demand and balance the market. Similar things, I'm sure, could be said about many other housing markets around the world.
The report pegs the current rental housing deficit in Toronto at about 9,100 units:
Rachelle Younglai's recent piece in the Globe and Mail does a great job summarizing Canada's COVID-19 housing boom. The title of the article is, "How Canada's real estate market defied expectations in the COVID-19 pandemic."
Non-mortgage debt is down. Mortgage debt is up. Money is cheap. And people are clamoring for drivable vacation homes. Average home prices in places like Prince Edward County and the Kawartha Lakes (both outside of Toronto) are up ~30% from Jan 2020 to Jan 2021.
But after I sent this article around this morning, I was reminded that this is a good summary of what has just happened. It, for the most part, does not speak to what might happen going forward.
None of us can travel anywhere. We're stuck at home. And immigration volumes last year were down some 48% in Toronto, 43% in Vancouver, 40% in Montreal, and 46% in Calgary. The Toronto region went from about 120,000 new permanent residents in 2019 to about half that last year.
The behaviors and market outcomes that we have seen over the last 12 months, therefore, make intuitive sense. But how about the next 12 months or the next 5 years? I would prefer to use this latter time period for decision making right now.
Chart: The Globe and Mail
Proptech Collective has just published their inaugural 2021 Proptech in Canada report. Here are a couple of screen grabs that you all might find interesting:
This week, RBC Economics published a study on Canada's rental market where they argued that the pace of new supply needs to at least double in markets like Toronto in order to meet future housing demand and balance the market. Similar things, I'm sure, could be said about many other housing markets around the world.
The report pegs the current rental housing deficit in Toronto at about 9,100 units:
What these images should tell you is that the Canadian proptech landscape is fairly Toronto-centric, but that it's also very much in its nascent stages. We're just getting started here.
I would encourage you to download a full copy of the report. It's very well done.
And because they believe that the cost of ownership is pushing more people into rentals, the number of renter households is expected to grow at an average rate of 22,200 units per year in Toronto.
If you take 22,200 units per year over the next two years, and add in the current deficit of 9,100 rental units, you get to a total count of 53,500 rental units. This is what RBC Economics believes must be delivered to the market in order to restore equilibrium, and decrease the upward pressure on rents.
Rental units are, of course, delivered to the market in two main ways. There's purpose-built rentals and there are for-sale units that end up as rental housing. But even if you amalgamate both of these tenures, we are not building enough housing.
Against this backdrop, I find it curious that developers are so often vilified. Earlier this week, I saw Jennifer Keesmaat tweet out that -- as we ready for this fall's federal election -- any sensible housing plan must move away from our current for profit housing delivery model.
Who, then, will build these 53,500 rental units? That part wasn't clear to me.
What these images should tell you is that the Canadian proptech landscape is fairly Toronto-centric, but that it's also very much in its nascent stages. We're just getting started here.
I would encourage you to download a full copy of the report. It's very well done.
And because they believe that the cost of ownership is pushing more people into rentals, the number of renter households is expected to grow at an average rate of 22,200 units per year in Toronto.
If you take 22,200 units per year over the next two years, and add in the current deficit of 9,100 rental units, you get to a total count of 53,500 rental units. This is what RBC Economics believes must be delivered to the market in order to restore equilibrium, and decrease the upward pressure on rents.
Rental units are, of course, delivered to the market in two main ways. There's purpose-built rentals and there are for-sale units that end up as rental housing. But even if you amalgamate both of these tenures, we are not building enough housing.
Against this backdrop, I find it curious that developers are so often vilified. Earlier this week, I saw Jennifer Keesmaat tweet out that -- as we ready for this fall's federal election -- any sensible housing plan must move away from our current for profit housing delivery model.
Who, then, will build these 53,500 rental units? That part wasn't clear to me.
Share Dialog
Share Dialog
Share Dialog
Share Dialog
Share Dialog
Share Dialog
