This month's Real Estate Newsletter focuses on the critical issue of housing affordability in Canada. I'm sharing the newsletter article here for your review and discussion. While this complex problem has numerous contributing factors, the article highlights five key reasons.
I encourage you to share your thoughts and perspectives in the comments below. What other factors do you believe are contributing to this crisis? Let's discuss this important topic together. (Full Newsletter Link Below)
Northern Experience Realty Group recently facilitated the successful sale of a home at its full asking price. Consistent with our marketing strategy for all properties, we shared the listing widely on social media. The post generated considerable engagement, attracting nearly 100 comments that offered diverse perspectives on housing affordability. The comments were almost evenly split between those who focused on the role of realtors and those who pointed to broader economic factors. At Northern Experience Realty Group, we believe in transparency and empowering our clients with knowledge. Therefore, we'd like to shed some light on five significant factors contributing to the increase in housing costs.
1. High Demand Outpacing Supply: This is the most significant factor. Ontario, especially the GTA, has a booming population fueled by immigration, interprovincial migration, and a strong job market. The rate of new housing construction has simply not kept up with the number of people looking for homes. This imbalance creates intense competition among buyers, driving prices upwards.
2. Investor Activity: Real estate has been seen as a lucrative investment, attracting both domestic and foreign investors. Investors buying properties to rent out or to flip for a profit reduce the supply available for owner-occupiers and can contribute to price inflation. This is particularly true in hot markets like Toronto and Vancouver
3. Construction Costs & Labour Shortages: The cost of building materials (like lumber) has experienced significant volatility and increases in recent years. Additionally, there's a shortage of skilled tradespeople in the construction industry. These factors increase the cost of new construction, which then translates into higher prices for newly built homes and impacts the resale market as well.
4. Lack of Affordable Housing Initiatives: While there are some programs aimed at increasing affordable housing, they often fall short of meeting the growing need. Insufficient investment in social housing, co-ops, and other affordable housing models means there are fewer options for low- and moderate-income individuals and families, pushing more people into the competitive private market.
5. Aging Population and Housing Needs Mismatch: Ontario has an aging population. Many older homeowners are "aging in place," staying in their larger family homes longer than previous generations. This reduces the turnover of larger homes that could be suitable for growing families. Additionally, the housing stock might not be ideally suited to the needs of seniors who may prefer smaller, more accessible units but find limited options, leading to a mismatch that adds pressure across different segments of the market.
It's a common misconception that realtors control market prices. If that were true, every home would sell for a fortune. The reality is that housing prices are driven by much larger economic forces. We hope the incoming government will implement policies to improve the current situation. Our team remains dedicated to providing expert guidance and support to our clients, regardless of market conditions. We'll keep you informed.
Hi everyone,
This month's Real Estate Newsletter focuses on the critical issue of housing affordability in Canada. I'm sharing the newsletter article here for your review and discussion. While this complex problem has numerous contributing factors, the article highlights five key reasons.
I encourage you to share your thoughts and perspectives in the comments below. What other factors do you believe are contributing to this crisis? Let's discuss this important topic together.
(Full Newsletter Link Below)
REG
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5 Factors Impacting Housing Costs
Northern Experience Realty Group recently facilitated the successful sale of a home at its full asking price. Consistent with our marketing strategy for all properties, we shared the listing widely on social media. The post generated considerable engagement, attracting nearly 100 comments that offered diverse perspectives on housing affordability. The comments were almost evenly split between those who focused on the role of realtors and those who pointed to broader economic factors. At Northern Experience Realty Group, we believe in transparency and empowering our clients with knowledge. Therefore, we'd like to shed some light on five significant factors contributing to the increase in housing costs.
1. High Demand Outpacing Supply: This is the most significant factor. Ontario, especially the GTA, has a booming population fueled by immigration, interprovincial migration, and a strong job market. The rate of new housing construction has simply not kept up with the number of people looking for homes. This imbalance creates intense competition among buyers, driving prices upwards.
2. Investor Activity: Real estate has been seen as a lucrative investment, attracting both domestic and foreign investors. Investors buying properties to rent out or to flip for a profit reduce the supply available for owner-occupiers and can contribute to price inflation. This is particularly true in hot markets like Toronto and Vancouver
3. Construction Costs & Labour Shortages: The cost of building materials (like lumber) has experienced significant volatility and increases in recent years. Additionally, there's a shortage of skilled tradespeople in the construction industry. These factors increase the cost of new construction, which then translates into higher prices for newly built homes and impacts the resale market as well.
4. Lack of Affordable Housing Initiatives: While there are some programs aimed at increasing affordable housing, they often fall short of meeting the growing need. Insufficient investment in social housing, co-ops, and other affordable housing models means there are fewer options for low- and moderate-income individuals and families, pushing more people into the competitive private market.
5. Aging Population and Housing Needs Mismatch: Ontario has an aging population. Many older homeowners are "aging in place," staying in their larger family homes longer than previous generations. This reduces the turnover of larger homes that could be suitable for growing families. Additionally, the housing stock might not be ideally suited to the needs of seniors who may prefer smaller, more accessible units but find limited options, leading to a mismatch that adds pressure across different segments of the market.
It's a common misconception that realtors control market prices. If that were true, every home would sell for a fortune. The reality is that housing prices are driven by much larger economic forces. We hope the incoming government will implement policies to improve the current situation. Our team remains dedicated to providing expert guidance and support to our clients, regardless of market conditions. We'll keep you informed.