Places to Grow is responsible for the towering edifices redefining Toronto’s skyline, and while there’s no end in sight to their continued development, the city’s immediate suburbs could expect a boost in new residents.
REMAX’s 2018 Housing Market Outlook report predicts an extremely moderate increase in home prices of just 2.5%. However, it also noted that B-20, the mortgage stress test slated to take effect January 1, could cause purchasers to move farther away from urban centres like Toronto and Vancouver.
“Certainly B-20 will have some effect,” said Elton Ash, REMAX’s regional executive vice president. “The predictions, depending on who you talk to, are anywhere from five to 20% of buyers won’t be able to afford a home that they’d get under today’s regime. Studies show that of those who are aware of the new regulation, a large percentage don’t believe it will affect their buying decisions, so there’s a bit of a disconnect of how B-20 will affect market.
Those prospective buyers in the market don’t really understand.”
Another key finding is that millennials, long thought to favour large, bustling downtown cores, are increasingly partial to suburban picket fences. One reason, said Ash, is because they’re aging.
“There are several reasons why people are moving out of the urban centres,” he said. “There was a strong belief three to four years ago that millennials were purely interested in the downtown condo lifestyle, didn’t drive cars, and wanted to be near subway lines. What we found is millennials are as interested in having the home and the yard to raise children in as any previous generation. This cohort are aging and are now in their prime, and are starting to raise their families, looking out to suburbia.”
That view is supported by Royal LePage, which this week released a market outlook report that was far less conservative in its estimation that housing prices will increase 6.8% by the end of 2018. Quoting a different report, Royal LePage’s CEO Phil Soper said:
“We did a study this summer, the Royal LePage Peak Millenial Study, which looked at intention, and of peak millennials aged 25-30, 87% believe homeownership was a positive thing and intended to someday to own a home. Sixty-nine percent intended to buy a home within five years.”
He also believes buyers will adjust to B-20 in the following ways:
“They’ll look for alternative sources of capital, like going to family; they’ll look for a different kind of property, like a smaller one; or they’ll look in a different area, so they move farther out of the downtown core.”
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The Places to Grow Act, Ontario’s growth plan, was drawn up to intensify urban hubs throughout the province, but B-20 might have the opposite effect.