Housing experts say Ontario’s new legislation will cut house prices, it just might not happen in time for the current generation of would-be buyers.
The Ontario government says its new housing legislation will help bring down the cost of homes by injecting another 1.5 million units into the supply by 2031. And there’s more involved than simple supply and demand economics, says the government.
Ontario’s construction targets are ambitious say industry sources. But a June report from Canada Mortgage and Housing Corp. suggested it would take 1.85 million more homes to reach a point where 40 per cent of the average household’s disposable income would pay for the average home. On its website, Generation Squeeze lauds Ontario’s attempts to address housing supply and crack down on speculation and vacant homes. But that, along with more supply, is not a silver bullet that will restore affordability.
“A lot of the supply side ambition here is spread out over 10 years and what we’re dealing with right now is very, very high prices through the pandemic and a very sudden increase in interest rates. That’s not going to help that today or tomorrow,” he said.“Hopefully if the market is more responsive, you have less prolonged imbalances where you have undersupplied market, and supply is able to respond to demand faster. So you have over a longer term — maybe — a more properly balanced market.
But Royal LePage CEO Phil Soper thinks it could take less time for a perceptible change in availability and affordability. He says real economic movement often happens around the margins.