The costs of raw land, lending and steel are top of mind for Canada’s homebuilders as they attempt to deliver homes consumers can afford, according to a new survey by PwC Canada, 2019 Emerging Trends in Real Estate, that was published with the Urban Land Institute (ULI).
The proportion of household income needed to service the costs of a single-family home grew to 53.5 per cent in the first quarter of 2018, with Vancouver leading the charge with 119.3 per cent of income required, the report found.
Land supply is the No.1 development concern heading into 2019, and the report highlights that all levels of government need to increase their focus on the supply side of the issue, not just demand, according to those surveyed by PwC.
Studies have shown that municipal and other government fees and regulations can add thousands of dollars to the cost of new homes, and delay development, the ULI noted.
“Dealing with the affordability issue is a shared responsibility between government and developers. While government addressed demand by introducing measures like tighter mortgage rules and foreign taxes, they neglected the supply side,” said Frank Magliocco, national real estate leader, PwC Canada.