To ever Mayor and politician and numbskull on Twitter, the costs of a new housing development play a significant factor in the “market rate” at which a development is offered at.
If the “market rate” is so easily known by everyone, why have there been cancelled projects due to lack of sales? Why would they launch at a price higher than the maximum market rate, everyone knows that number!?
Even if the maximum market rate for dictated to developers via a higher power, most are still selling before construction has started and costs can rise significantly between start of sales and the building’s registration.
I work as a consultant in the new development industry in Toronto. Some of my opinions align with pro-growth and pro-housing supply advocates. This is my truth.
If you want to engage with me on the topic of housing, don’t bother with the you’re biased, a shill, etc. Its lame.
I don’t want to pave over all the farmland, I am not paid to make pro-development tweets, I don’t make statements so I can make windfall profits. My fees don’t grow with completions or in line with price growth.
I am actually disgusted by the price of new condos in the GTA, and the rapid price growth isn’t good for my business, it creates more risk for developers, more risk for cash-flow negative investors, and reduces the pool of buyers/renters of the completed product.
We're building a lot of housing, so we must be building enough housing. True?
We're in a building boom and prices are still going up, so supply must not be the answer. True?
We're building more housing than we ever have in the Toronto CMA. True?
Chances are you're never going to change your mind as it relates to the first two questions, you have your priors and nothing I say or anyone else says is going to change that. Data be damned, it just feels like it!
However, I just wanted to comment on #3 in the above.
Between 1990 and 2019, the Toronto CMA has built just under 32,000 new housing units on average per year based on completions data from CMHC. The CMA has topped that long-run average in 4 of the last 5 years.