Canada's Condominium Magazine
You have to wonder whether Ontarians who express an intention to buy a home in this province in the next two years aren’t a little deluded. Half of them, including Torontonians, say they are “likely” to buy a detached home. In the case of the Toronto residents, that’s an increase of 21 per cent from a year ago. Haven’t they heard that detached homes in Toronto, both resale and new built, are as scarce as Fabergé eggs, and almost as expensive? The average detached home in Toronto is now pushing $1.3 million. A recent RBC study found that Toronto homeowners now must spend 63 per cent of their income on housing costs.
Even so, about eight in ten Ontario residents consider real estate a good investment and important to them personally. The obvious question is, where are all these buyers going to find what they want? Home builders aren’t building enough new homes to satisfy demand, and the resale market is chronically under listed. As the CEO of the Ontario Real Estate Association, Tim Hudak, put it, “No wonder prices are rising so quickly.”
Perceptions of real estate markets in Ontario remain strong among consumers, with more than half of residents viewing conditions in their local market as favourable and likely to improve in 2017.
According to the results, it is likely that perceptions of strengthening markets will continue in Ontario into the foreseeable future. Despite rising house prices in the GTA, buyers remain optimistic. In fact, even more Ontarians than last year say they intend to buy in the future. This speaks to the value of home ownership and the timelessness of this all-important commodity.
Others are not so sure. An investment manager told BNN today that he is worried about the high percentage of the Canadian economy that depends on the housing sector and housing-related activities. Of the 86,000 new jobs created in Ontario in 2015, half were related to real estate and leasing. Lyle Stein of Vestcap Investment Management said that real estate has replaced manufacturing in the Canadian economy, a development he sees as troubling. If the market weakens, especially in Ontario, it could “pull the rug out” from under that pillar of the economy, the only one he says is actually strong at this point.
One of those real estate–related industries that is doing well these days is home renovations. Many owners who don’t intend to sell their homes are instead renovating them, using their increased equity to finance the work. Long-term renovations, according to the chair of the Renovator and Custom Builders Council, tend to focus on improving the energy efficiency and comfort of the home. Short-term renovations, on the other hand, tend to be cosmetic, with owners focusing on improvements that will increase salability.
Altogether, more money is spent on renovations and repairs than on new home construction in Ontario. Altus Group research shows that the renovation sector was worth more than $70 billion in 2015, and is expected to be worth more this year and next.
One factor influencing the growth of the home renovation business is the rapid development of new technology. It is now easier than ever to change the look of a home by replacing the flooring and the cabinetry, for example. A manager at a renovations firm told the Toronto Star that this is especially true in condos, where new owners simply want a new look, even though the condo may be only a few years old. A “surprising” amount of kitchen counters and flooring gets torn out of condos because they don’t suit a new owner’s taste.
For anyone considering a reno, Dennis Bryant of Bryant Renovations advises that rather than simply getting three quotes from three different contractors, which is commonly recommended, consumers would be better served by talking to three or four different contractors first. Developing a sense of trust and understanding with a potential contractor is more important than simply getting numbers on a page, he believes. Once you know you’re on the same page, the budgeting can evolve in a cooperative way.
It is also strongly recommended that home owners choose RenoMark renovators, who are licensed and endorsed by several home builder associations, including the Building Industry and Land Development Association of Toronto.