There is not a fundamental lack of housing supply in the Greater Toronto Area according to an academic at Fraser University.
Assistant professor Josh Gordon wrote his report for the Ryerson City Building Institute and puts him at odds with the city’s real estate board which argues that supply is the key issue.
Gordon says that the construction of homes in Toronto is in line with historic norms of population growth but that the high demand is being driven by speculative purchases fuelled by rising prices.
This demand he says comes from both domestic and foreign buyers but is not indicative of a fundamental supply problem, although he acknowledges the shortage of listings compared to demand and that owners of existing homes may be reluctant to sell too soon as prices rise.
Gordon warns that “as housing bubbles are allowed to expand, many are hurt or drawn into unsustainable financial situations.”
Last week, Toronto Real Estate Board president Larry Cerqua called for the provincial government not to introduce a foreign buyer tax but to tackle supply in the region.
"The provincial government should work with municipalities and related industry stakeholders to look at ways in which the supply of housing could be increased, including, potentially revisiting land use designations in built-up areas to allow for a broader array of home types to be built, streamlining the development approvals process, streamlining the permit process, and examining ways to incentivize land owners to develop," said Cerqua.
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