Housing Is Costing Ontario Its Edge
1 min read.
The recent correction of the Canadian real estate market has given hope to young adults, but the Greater Toronto Area (GTA)'s housing remains unattainable for most. Despite a potential 30% price drop in a deep recession, affordability remains a pressing issue, causing Ontario’s youth to seek more affordable options in other provinces. The average home price in the GTA reached $1.15 million in July 2023, with projections indicating a further 9.3% increase by the end of 2025, potentially worsening affordability. Even in the direst economic scenarios, Desjardins warns that affordability in Canada's largest city will not return anytime soon.
Desjardins envisions a 29.6% price drop by Q4 2025 in the report, but this would still leave homes at an average of $0.81 million. Under these circumstances, the Chief Economist and Strategist and Marc Desormeaux, Principal Economist Jimmy Jean does not anticipate a substantial improvement in affordability. He notes “While our base case economic and Toronto housing market forecasts already assume there will be a recession in Ontario, it’s projected to be mild by historical standards,”
The outflow of young adults from Ontario, especially the GTA, raises concerns about the province's entrepreneurship and economic vitality. To address this issue, a comprehensive approach to housing supply and affordability is crucial. Given the challenging path to affordable housing in the GTA, policymakers must prioritize housing supply and affordability to mitigate the long-term consequences of an increasingly unattainable housing market.
References
Jean, J. (2023, September 5). How Low Can Prices Go in T.O.?. Desjardins. https://www.desjardins.com/content/dam/pdf/en/personal/savings-investment/economic-studies/toronto-housing-sept-5-2023.pdf
Wilson, C. (2023, September 5). Affordability unlikely to return to Toronto housing market ’anytime soon: Desjardins. CP24. https://www.cp24.com/news/affordability-unlikely-to-return-to-toronto-housing-market-anytime-soon-desjardins-1.6548128
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