Some quick thoughts about a few of the articles I’ve been reading and following this past week:
- Toronto’s housing market is always in the news with the wild swings as the powers-that-be try to gain some control of housing prices. After a lot of fanfare about a number of new measures as part of the Fair Housing Plan (including a foreign-buyer’s tax and more stringent rent-control measures) a first cut on housing sales activity has been released and it’s showing a drastic reduction in sales. However, the initial reports on foreign-buyer activity shows the number of foreign-buyer purchases in the Greater Golden Horsehoe is less than 5% of the market (though John Pasalis at Realosophy did tweet that this figure is an average and it’s likely higher and lower for specific sub-markets). This is in-line with what industry had initially been saying when the tax went into effect. So if the foreign-buyer component is so small, what’s causing the slowdown in sales? The simple answer is that it’s not any one thing. The Fair Housing Plan consists of several measures, including more stringent rent-control rules that also affect domestic investors, and there was an overall sense in the market that the Bank of Canada would be raising interest rates this year. Overall, housing market activity has been incredibly heated over the last two years before slowing down in the summer when policy measures were announced and sentiments towards an interest-rate hike became more certain. On a bit of a side, but related, note: Following on the heels of its foreign-buyers tax last year, which cooled down the market for only a few months before it picked up again, Vancouver introduced an empty homes tax this week.
- Let’s talk a bit more about housing in a broader sense rather than the whacky GTA real estate market sense. One thing that’s striking is that housing prices are soaring everywhere (well, major cities anyway). That’s led to a lot of people proposing different ideas of what constitutes a “home”, as people increasingly find themselves priced away from the traditional notions of home ownership (a detached house with a yard in much of North America). In the thought experiment sphere, a group of young upstarts in the UK are trying to redefine notions of a “house” for generation-rent by unpacking traditional layouts and looking at the functional value not just of space but also of furniture. Following tight on the micro-condo/container housing craze, a developer in Sacremento, California, is testing the MicroPAD (Micro Prefab Affordable Dwelling). The City of Sacremento is hoping to use it as a strategy for providing affordable housing for homeless residents. Modeled on similar prefab housing solutions in Sweden, the modular units are manufactured overseas (China and Poland) and snapped together on site. As a result, a MicroPAD costs significantly less than a similar unit built on site using traditional construction methods (as they do).
That’s it for this week.