As summer trudges along, temperatures aren’t the only things heating up, as the buying frenzy -- albeit at a slower pace -- continues. Home buyers continue to grapple with a lack of supply, which is spurring bidding wars beyond the province's most expensive markets, pushing prices even further, and worsening affordability in the process.
As a result, Ontarian home buyers are being priced out of the red-hot market, and they fear that housing affordability in the province is only getting worse, and the future isn't looking any brighter -- unless the government takes action.
On Tuesday, the Ontario Real Estate Association (OREA) released new polling data that revealed that nearly half (46%) of prospective home buyers under the age of 45 are now considering moving out of the province in the hopes of finding a home they can afford.
At the same time, more than half of these aspiring buyers (56%) say they have either given up or are now pessimistic about the possibility of buying a home in the community they want to live in.
While it's clear Ontarians are worried about the lack of available affordable housing, there's also a greater issue at hand: inadequate housing supply could have a detrimental effect on Ontario’s competitiveness and ability to retain talent.
“The lack of housing supply is leading many to look outside the province for their first homes and that will make it difficult to retain and attract talent in Ontario in the near future,” said OREA CEO Tim Hudak.
While the provincial government has already enacted Bill 108, the More Homes, More Choice Act, which addresses the different housing challenges people are facing across the province, Hudak says more needs to be done, especially on a municipal level.
“The Government of Ontario’s More Homes, More Choice Act is an excellent first step but if we want to reverse this brain drain, municipalities also need to deliver by opening up more housing opportunities.”
Though, Hudak is far from alone in calling for more government support. According to OREA, a very strong majority of Ontarians feel that housing affordability should be a very high (31%) or a high (36%) priority for the Ontario government.
The provincial real estate association says there are a number of steps that Ontarians think the government could do to make housing more affordable, with 91% saying the province needs to stop money laundering in the Ontario real estate market with a publicly searchable registry of who owns the properties. While 90% say the government should consider introducing tax credits and incentives for homeowners to make improvements in their homes or improve energy efficiency.
Moreover, 89% of Ontarians say the government could make it easier for first-time home buyers to get into the market by increasing first-time home buyer tax rebates, while 87% say the province should consider redeveloping surplus commercial properties into housing.
“The affordability crisis continues to crush the dream of home ownership for many Ontarians and this has been intensified by the economic impact of the pandemic,” said Hudak. “Governments need to act if we want to create future generations of homeowners and that starts with pro-growth policies that could bring affordability closer to first-time home buyers and address the supply shortage.”
Consistent with past OREA research, the real estate association says Ontarians agree that the housing sector can be the engine for Ontario’s economic recovery.
Furthermore, almost half of Ontarians believe that residential construction will be key to economic growth and job creation when the pandemic is over.