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Toronto Housing Accelerator Funding

To no one's surprise, Toronto is grappling with a significant housing affordability crisis. The city's population is growing rapidly, and with the recent surge in interest rates, the demand for affordable housing has skyrocketed. Amidst these challenges, the Canadian Housing Accelerator Fund (HAF) emerges as a beacon of hope, promising to create more homes at a lower cost. But will the $471 million in funding from the HAF make a meaningful difference in reshaping Toronto's housing landscape and alleviating some of the sector's pricing constraints? Let's explore.

What is the Canadian Housing Accelerator Fund (HAF)?

Initiated by the federal government in March 2023, the HAF is a program that aims to inject approximately $4 billion into local and municipal governments. This targeted incentive funding is designed to encourage housing creation and development permitting initiatives, focusing on developing complete, low-carbon, climate-resilient communities that are affordable, inclusive, equitable, and diverse​​​​. [1][2]

How will the Canadian Housing Accelerator help Toronto's Housing Landscape?

On Thursday, December 21st, Prime Minister Justin Trudeau joined Mayor Olivia Chow to announce the HAF's recent agreement with the City of Toronto. The HAF committed to an investment of over $471 million to help fast-track the construction of nearly 12,000 new housing units over the next three years, contributing to a broader target of over 53,000 homes over the next decade. This funding intends to help prepare Toronto and the Greater Toronto Area (GTA) for continued population growth, which is expected to increase from 7.2 million in 2022 to over 10.5 million by 2046. [3]

A SnapShot of Toronto's Housing Market

As we enter 2024, the Toronto housing market presents a complex and diverse picture. In 2023, the GTA witnessed its slowest year since 2000 in terms of home sales, with only 65,982 homes sold. Despite this, the average GTA home sold for $1.08 M in December, representing a 3.2% increase from the previous period. [4]

However, within the core City of Toronto, the average selling price was slightly lower at $1.06 M, representing a 4% increase from the previous year. Different regions within the GTA showed diverse trends. For instance, Oshawa experienced a significant 6% decrease in prices, whereas York Region saw a modest 1% year-over-year increase. [5]

The market's dynamics are further influenced by various factors such as interest rates, immigration, and shifting buyer preferences. For example, the pandemic has led to a trend of buyers seeking more space and greenery, affecting the condo market and driving demand outside urban areas. [6]

As we look to the future, the path of Toronto's housing market and the impact of the Canadian Housing Accelerator Fund (HAF) will be closely intertwined. The challenges are manifold, but the opportunities for positive change are equally significant. With the fund's strategic investment and the collaborative efforts of various stakeholders, there is a strong foundation for addressing the growing need for affordable housing. However, the evolving dynamics of the market, influenced by economic factors, legislative changes, and shifting demographics, will play a crucial role in determining the effectiveness of these initiatives.

For more news and insights on Toronto's housing market, visit tauruscontracting.ca/news/ontarios-bill-23

References

1. https://www.cmhc-schl.gc.ca/professionals/project-funding-and-mortgage-financing/funding-programs/all-funding-programs/housing-accelerator-fund
2. https://www.budget.canada.ca/fes-eea/2023/report-rapport/chap1-en.html
3. https://www.pm.gc.ca/en/news/news-releases/2023/12/21/removing-barriers-build-homes-faster-toronto-ontario
4. https://wowa.ca/toronto-housing-market
5. https://www.noradarealestate.com/blog/toronto-housing-market/
6. https://blog.remax.ca/toronto-housing-market-outlook/