Supply, Demand, and Southern Ontario’s Housing Market

Source: CREA
Source: Ratehub
  • Baby Needs a New Home and One Million New Ontarians show how Ontario experienced a population boom, causing yearly population growth to nearly double from 120,000 to 200,000 people overnight. This was due to a combination of the international student boom, increased immigration, and changing economic conditions causing Canadians to move to Ontario rather than from Ontario. I give a breakdown of the numbers here.
  • In Forecast for Failure, I show how the provincial government should have seen this population growth coming, as it was the outcome of policy choices made by the Harper and Trudeau governments. For whatever reason, Ontario’s government failed to forecast that population growth, failed to alter the province’s Growth Plan to accommodate that growth, so housing construction stayed largely unchanged in the GTA. Population growth boomed, housing construction didn’t.
  • In The Growth of London Outside London, I show how housing completions did rise in parts of the province after 2016. However, where they went up is in smaller rural communities outside of the GTA, rather than in our cities.
Source: CMHC
Source: CMHC
  • In 2019, 60,000 people, on net, left the City of Toronto and Peel Region for other parts of the province, looking for housing they could afford.
  • The number of young children in the City of Toronto started dropping substantially, as young families moved in order to find housing, or individuals put off having families, as they didn’t want to raise a child while living in their Dad’s basement.
  • Sprawl in Ontario exploded, as the increase in homebuilding was experienced in smaller, formerly rural communities. Commutes increased, as often individuals moving to those towns still had to drive to the GTA to work every day.

Then the pandemic happened

Ontario’s population has not grown all that much during the pandemic, yet as shown by the first graph, real-estate prices in London-St. Thomas have absolutely skyrocketed. Home prices have increased by as much as $200,000 in a single year. What the heck is going on?

Source: CREA

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Mike Moffatt

Mike Moffatt

Senior Director, Smart Prosperity. Assistant Prof, Ivey Business School. Exhausted but happy Dad of 2 wonderful kids with autism. I used to do other stuff.