In another sign of how strong and resilient the GTA’s real estate market is, housing suppliers are having trouble accessing land to build properties on because of incredible competition and strong demand from builders, developers, and construction companies. The cost of a single-family lot in a cheaper Toronto neighbourhood now averages some $500,000.00. Similar lots outside of the GTHA could cost from $100-150,000.00.
Government thirst for tax revenue has also increased land prices as development charges and fees have been steadily increasing over the past several years. While Toronto development charges are fairly low for regional standards, averaging roughly $25,000.00, other municipalities more dependent on real estate and development for their revenues charge much higher fees than Toronto. Prices for commodities such as concrete have risen, along with the costs of skilled labour, which are in very high demand, particularly in the condo construction side of the market.
While the prices of most housing continue to increase, albeit not as aggressively as before the government implemented a 15% foreign buyers tax and Home Trust ran into trouble, land prices are continuing to increase rapidly.
Land prices won’t be coming down anytime soon. The government of Ontario has been implementing comprehensive policies to restrict land for agriculture and greenspace for many years now. The hallmark policy along these lines has been the famous Greenbelt, which locks out housing development from a massive belt of land on the outer periphery of the Greater Toronto and Hamilton Area. Additionally, the government is imposing new rules on developers and builders, forcing them to build a greater proportion of residential housing in existing neighbourhoods as opposed to new subdivisions.
Farm land values in Ontario increased by over 155.5% from 2005 to 2015. This was the second highest increase in value in the country, overtaken only by Saskatchewan, where prices increased by over 200%. The average price of an acre of prime southern Ontario farmland is now just over $10,000.00.