If you paid any attention to the housing market at all this year, you know there were some big moves made on a national, provincial, and municipal level. With that in mind, we reviewed all of 2019 and put together a list of 2019 highlights that will definitely have a lasting impact on the housing market throughout 2020.
Housing Supply Action Plan
During the spring, the province announced its More Homes, More Choice: Ontario’s Housing Supply Action Plan
, which includes amendments to 13 government Acts in an effort to improve housing supply. Overall, the Action Plan aims to lower costs, improve the rental market, build more homes in a quicker fashion, and explore housing innovations.
A couple guides were released recently, including how to buy or build a tiny home
, and everything you need to know about co-owning
. With the provincial government prioritizing housing supply and innovative housing solutions, the housing market will be much more diverse in 2020 and beyond.
Best quality of life
At the beginning of the year in the U.S. News & World Report, Canada ranked number one for best quality of life
. Our country is considered politically stable and we have an overall healthy job market. Canada scored low on affordability, but that didn’t change the fact that it offers the best quality of life in the world! With a high quality of life, it’s possible that more foreign buyers continue to shop around the hot Canadian markets.
Big plans in Toronto
Toronto made a couple big moves this year. At the beginning of 2019, the City of Toronto announced they were fast tracking the development of 11 surplus City properties to create 10,000 new residential units
. Phase 1 includes 3,700 affordable rental units with average rents not exceeding 80% of average market value.
Then just recently, the City of Toronto approved the $23.4 billion HousingTO 2020-2030 Action Plan
, which will fight homelessness, and improve social housing, rental housing, long-term care housing, and homeownership.
Improving affordability is the name of the game for the City of Toronto for the next few years, except with regards to property taxes
. Mayor John Tory recently broke his campaign promise and announced that property taxes will go up by 8% by 2025.
First-Time Home Buyer Incentive
There’s been a lot of controversy about the effectiveness of the FTHBI
, but it still seems like it will allow thousands of first-time buyers across Canada get onto the property ladder.
The FTHBI is a shared equity mortgage with the Canada Mortgage and Housing Corporation. You provide a 5% down payment and the CMHC will give you another 5% for resale homes and 10% for new homes to go towards the down payment. The interest-free and payment-free loan is paid back when you sell the property, with appreciation factored in.
While the Liberals were campaigning, they announced they would expand the FTHBI
to allow for larger mortgages, so we’ll see if that has any impact on first-time buyer activity in 2020.
In addition to the FTHBI being expanded, a Liberal government
means there could be a vacancy tax for non-residents and non-Canadians. This could decrease foreign buyer activity. There’s also a net-zero homes grant in the works, which would provide owners with $5,000 for new homes built to net-zero standards.
Net-zero in Toronto
Speaking of net-zero — the City of Toronto made another big move by announcing that all new homes must be built to net-zero standards by 2030
. This could affect the costs of building a home, and those costs are passed down to the buyer. So, while it is a smart move for our environment and air quality, there could be a spike in prices as builders adjust to building net-zero homes.
Condo construction hits record high
In the first quarter of the year, new condo construction in the GTA hit a record high
, according to Urbanation. There were 71,378 units under construction in 242 projects. What’s going to happen in 2020 is that a lot of these units are going to hit the resale and rental markets (of course many of them were also purchased by end-users, so people will be moving in). This is much needed supply and will hopefully slightly moderate price and rent growth.
Quayside and Rail Deck Park updates
The controversial “smart city” project, Quayside, in Toronto’s east end took a step forward
(with many conditions). As the master-planned waterfront community progresses, tech company Sidewalk Labs, will be exploring different urban solutions that rely on smart applications.
Also, the ambitious Rail Deck Park
plan gained momentum as the LPAT dismissed an appeal of the City of Toronto’s parkland designation. We included this in our highlights because a huge park over the tracks from Bathurst to Blue Jays Way would greatly impact the value of the properties in Fort York, City Place, and along Front St. where there is a lot of development in the works.
Trust in Real Estate Services Act
The provincial Real Estate and Business Act was outdated, so Ontario announced TRESA
in an effort to protect homebuyers and sellers, and create new freedoms and more strict penalties for real estate agents and brokers. If TRESA turns out the way everyone hopes, it will make working with an agent a better and safer experience.
New short-term rental regulations
Say goodbye to Airbnb. Toronto announced new short-term rental regulations
, which basically make it so you can’t rent out secondary residences on a short-term basis via companies like Airbnb. Short-term rentals are still allowed, but only in your primary residence.
Over the last few years, Tarion made headlines as condo projects were cancelled and thousands of homeowners struggled with a restrictive and convoluted warranty program. Ontario announced they will completely overhaul
the new home warranty program, and with the announcement, the CEO stepped down. Hopefully, this leads to more confident new home purchases across the province.
As you can see, a lot happened in 2019, and it will all trickle over into 2020. We can’t wait to start the new decade and see how all of the above play a role in the future of the housing market.