Matt Young’s Journey into Toronto Real Estate:
With over 15 years of experience in real estate development, Matt has delivered over 15,000 units across 12.2 million square feet of development. His passion for real estate began while working on small residential and commercial properties in Toronto’s Beaches and East York areas. This hands-on experience fueled his desire to make a lasting impact on the city’s skyline and housing landscape.
In 2019, Matt founded Republic Developments with a vision to address the complex challenges of the Toronto real estate market. With his experience at Lifetime Developments and Capital Developments, Matt has a comprehensive understanding of everything from planning and sales to marketing and asset management, which he now leverages to tackle Toronto’s housing supply challenges head-on as CEO of Republic and as an up-and-coming voice for the Toronto development industry.
The Core Issue: Supply and Demand Imbalance in Toronto’s Real Estate Market:
Something we have been talking about at Fox Marin for several decades is that Toronto’s housing affordability crisis can be a simple economic principle: supply and demand. Matt agrees and emphasizes that while demand for housing continues to rise, the supply of new homes needs to catch up. From a developer’s perspective, Matt underscores how the development process in Toronto involves numerous hurdles, from purchasing land to obtaining permits to putting shovels in the ground, which adds time and cost to projects, making it increasingly more complex to deliver affordable homes.
“The problem has always been entitlements and approvals,” says Matt. “Toronto’s development process has only become more complicated, with more rules and regulations added, creating a bottleneck that delays the introduction of new supply.” While the Ontario government has tried to expedite the approval process, bringing new inventory to market requires more time and effort. These costs will be passed down to purchasers, further driving up prices.
Another issue affecting the market today is the anemic sales of new pre-construction condos. Due to rising interest rates and economic uncertainty, many buyers hesitate to invest in pre-construction projects. In this climate, condo investors have much better opportunities in the resale market at $1,000 – $1,200 per square foot than at preconstruction, which trades at around $1,600 – $1,800 per square foot for a property that has yet to be built.
As the sales of new homes in Toronto continue to dwindle, This will affect the amount of new inventory coming online, which could lead to significant inventory shortages starting as early as 2027, causing prices to appreciate dramatically.
The Impact of Taxes on Toronto’s Housing Prices:
One of the most significant but often overlooked factors contributing to Toronto’s housing affordability crisis is the growing tax burden on developers. Matt points out that nearly 30% of the cost of building a new home in Toronto now consists of taxes, compared to just 12% when he first started in the industry.
These taxes, which include development charges, parkland fees, and property taxes, amount to roughly $240,000 per average condo unit. This cost increase is passed down to buyers, making pre-construction condos significantly more expensive than resale units.
“When nearly 30% of the cost of a new condo is taxes, it’s clear we have a problem,” Matt states.
This tax burden makes homes more expensive and discourages developers from bringing new projects to market, exacerbating the supply-demand imbalance that fuels Toronto’s affordability crisis. It is essentially becoming a doom loop!
Proposing Solutions for Toronto’s Housing Market:
Matt proposes reducing the tax burden on new developments to address Toronto’s housing affordability crisis. By cutting unnecessary taxes, developers could reduce the cost of new homes by 20% to 25%, making them more affordable for buyers. “If you want to solve the housing supply issue, you need to make it cheaper to build,” Matt emphasizes.
Matt and a group of developers have formed a developer housing affordability advocacy group called Cantwin. They call on all levels of Government to reduce taxes on new construction, and for every dollar of reduction, they pass those reductions over to consumers, which could reduce the prices of new homes by as much as 30%. The number one issue facing consumers right now is the housing affordability crisis. If politicians want to get serious about opening up new affordable supply, Matts’s proposal could have an immediate effect in reducing home prices. You can find more about this initiative at cantwin.ca.
A Call to Action for Toronto’s Real Estate Market:
The Toronto housing affordability crisis is a complex issue that requires urgent attention from government officials, developers, and industry stakeholders. As Matt Young points out, reducing taxes on new developments is one of the most effective ways to lower the cost of housing.
To make a real difference, all levels of government must work with developers to streamline the approval process and cut unnecessary costs. By fostering an environment that encourages new construction, Toronto can begin to address the supply-demand imbalance that has contributed to soaring home prices.
As the city continues to grow, Toronto’s real estate market will need to adapt to meet the needs of Torontonians. With leaders like Matt Young advocating for meaningful change, there is hope that Toronto can actively take steps to overcome its housing affordability crisis and provide more affordable housing options for future generations. Amen!
The Future of Toronto’s Real Estate Market:
While the prospects of Toronto’s real estate market are uncertain in the short term, Matt remains heavily optimistic about the future. He predicts that by 2030, the price of a one-bedroom condo in Toronto will exceed $1 million. Matt points to rising construction costs, continued immigration, and the overall demand for housing in Toronto as driving this increase.
Despite the slowdown in the market, Matt believes now may be a good time to invest in Toronto real estate. “As interest rates drop, we’ll see demand pick up again, especially in the resale market,” he notes. However, without significant changes to reduce the cost of new developments, the affordability crisis will persist, and the gap between resale and pre-construction condo prices will continue to widen.
Contact Fox Marin, Toronto’s downtown luxury real estate brokerage, today to learn more about the advantages of hiring a quality team!
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This article was written by Ralph Fox, Broker of Record and Managing Partner here at Fox Marin Associates. Ralph is a Torontonian native who recognized from an early age that the most successful people in life apply long-term thinking to their investments, relationships, and life goals. It’s this philosophy, along with his lifelong entrepreneurial drive and exceptional business instincts, that help to establish Ralph as a top agent in the real estate market in downtown Toronto.
