Study contradicts common narrative about detached housing demand

by Neil Sharma09 Sep 2019

A study from the Centre for Urban Research and Land Development at Ryerson University postulates that, contrary to popular belief, single-family detached homes in the Toronto region aren’t becoming relics.

Using survey data compiled on the behalves of Genworth Canada and the Toronto Real Estate Board by Environics Research and Ipsos Reid, respectively, it’s been determined that interest in single-family detached houses remains robust. For one, nearly half of first-time buyers purchased a single-family detached home in the last two years. In fact, 46% of first-time buyers bought single-family detached houses in 2015, and in 2017 and 2019 that number rose to 47%.

Moreover, across both the country and Ontario, more than 80% of first-time buyers bought ground-related product.

“If we look at the combined purchases of singles, semis and townhouses (what we call ground-related housing) the Canada-wide proportions remained stable at 83%... with only 16-17% of first-time buyers buying a condo apartment,” said the study, written by Frank Clayton and Hong Yun (Eva) Shi. “For Ontario, the proportion of buyers buying a ground-related home was similar to Canada as a whole, though the proportion purchasing a condo apartment increased slightly between the 2015 and the 2019 surveys, from 17% to 19%, after a dip in the 2017 survey.”

In the Greater Toronto Area, according to the 2019 Genworth survey, 31% of first-time homebuyers purchased a single-family detached house, while 71% bought a ground-related home. Much has been made about first-time buyers flocking to the regional condo market, but the Genworth survey revealed that only 29% purchased a condo.

In the City of Toronto, the same Genworth survey showed the majority of first-time buyers purchased a ground-related home, including 30% who bought a single-family detached house.

The TREB survey found about 75% of GTA and 70% of City of Toronto prospective buyers intended to own a ground-related home. Forty-three percent of prospective buyers also had their sights set on a single-family detached home, while only 26% intended to buy a condo.

Curiously, interest in condo purchases was higher in the 905 region. In 2015, 61% of prospective buyers intended to purchase a single-family detached house, but by 2018 that number fell to 48%. The share of buyers who intended to buy condos rose from 11% to 23%.

“Single-detached houses, as well as close substitutes like semis and townhouses, are here to stay in the GTA,” said the study. “The demand pressures from millennials and other buyers will more than offset the desire by environmentalists and their allies, including many land use planners, to sharply constrain the production of new single-detached houses.”

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