Intensification of Development in the GTA
The Provincial Government in Ontario has dealt with the issue of continuous urban sprawl by enacting legislation, regulations and policies which encourage the intensification of the use of existing developed areas.
Why create new roads when the old ones will do?
Why transfer farmlands to subdivisions when rebuilding, redeveloping and intensification may do the trick. Populate the existing schools rather than build new ones.
To a large extent intensification means that low rise and high rise projects will differ in price.
There are fewer low rise projects. Low rise really means one and two storey detached, semi-detached and townhouses.
You will notice that the GTA has become the condo capital of North America. Highrise projects, that is, apartments, stacked townhouses and lofts (in converted buildings) have become increasingly more popular.
There is no doubt that low rise projects cost more. The land acquisition costs can be spread among more units in a high rise project, and that keeps the price down. However, there is also the supply and demand factor. Lots of high rise projects are coming on the market. Prices have been escalating, but we have seen in 2012, that the high rise market peaked somewhat. The reason is simple: there’s lots of supply.
And, there’s not enough land for the low rise projects. If you were a developer, you would build high rise, since there’s more profit for you.
So, what’s going to happen?
Low rise housing prices will escalate due to supply and demand. This will occur in both new and resale housing markets.
As time goes by, you will look to a significant disparity in low rise and high rise prices.