The Angus Reid Institute released the results of its Pain Index for Metro Vancouver and the Greater Toronto Area, reporting that housing affordability has replaced transit as the top concern for most GTA residents.
When comparing the GTA and Metro Van, the “Happy” category is the saddest category. Only 16% of the residents in each area are happy according to the survey. 31% of GTA residents are “Comfortable,” and Metro Van has a slightly higher share in this category with 35%. In the GTA, 27% are “Uncomfortable” compared to 26% in Metro Van. The bad news is that 27% of GTA residents are “Miserable.” Metro Van comes in lower in this category with 22%.
So, what makes GTA residents so uncomfortable and miserable? 54% say housing affordability is the main cause of pain. In 2015, only 36% of residents felt housing affordability was a top concern.
25% are hoping for housing prices to drop by around 10% in the next few years, and a shocking 27% are hoping housing prices fall by 30% or more! If housing prices fall 30% in the next few years, we can consider that a major crash.
Among renters, 59% are “seriously considering” leaving the GTA because housing costs are too high. Overall, 47% are considering leaving the GTA. That number is much higher than we would have thought, and it’s concerning. If we lose that many young, skilled working professionals and the deep pockets of the retiring baby boomers, then the GTA is in trouble. 84% are concerned the next generation won’t be able to afford homes in the GTA.
What’s to blame? 30% blame low interest rates and 42% blame foreign investors. Earlier this year, foreign buyer activity dropped to a 2% share in the GTA, so we don’t agree that foreign investment is a primary factor in rising housing prices.
Here’s where things get funny and the greed and selfishness of humanity surface. When asked about the price of housing in the GTA, 72% said it was “unreasonably high.” But, when asked about the value of their own homes, 25% said “reasonable overall” and 48% believed their home’s market price was “high, but understandable given the area.”
How can 72% of GTA residents believe housing is priced unreasonably high, but 73% believe the market price of their own homes are reasonable?
This is part of the reason housing prices are so high. Sure, a large share of residents want housing prices to fall, but there are so many homeowners out there who enjoy owning a home valued so high, and when it comes time to sell, do you really think they’ll sell for less than they can get?
There are a number of factors impacting housing prices and it will take the right combination of solutions to cool the market in a healthy manner. One thing the survey found is that GTA residents are supportive of government intervention. 68% believe the government needs to be more involved to improve housing affordability. That share grows to 75% when looking specifically at the City of Toronto.