Housing Market Stress Test:
• Are we oversupplied?: 40,000 units are required annually for new arrivals to the GTA, but our delivery capacity from skilled trades is only 15,000 units
• Aging of these trades & contract issues could compound further supply shortages
• We are more likely to have an undersupply or supply type issue versus an oversupply one – this could in turn upset pricing & set us up for a reckoning of a different kind
• Greater discipline in land sales is required; land sale is not undersupplied just badly handled
• We’re heading into an inflationary cycle where construction costs & land prices will outpace new suite sale price tolerance
•Builders & investors should be cautious of relying on an over leveraged rental backstop in 2015/2016 with respect to the gap between saleability & nominal rent increases
