Homeward Hills development is continuing construction, with some homes nearing completion, at the northwest corner of Harmony Rd. and Conlin St. in Oshawa, Ont., on July 10.Shay Conroy/The Globe and Mail
Once a country crossroads in rural Oshawa, the intersection of Conlin Road and Harmony Road is now the site of four major development projects, all set to become the low-rise homes that will feed an insatiable housing demand.
In its latest data set release, Ontario’s Building Industry Land and Development Association (BILD) said 1,333 single-family homes were sold in May, a 123-per-cent increase over the same period last year – but 3 per cent below the 10-year average. Despite the countless rows of homes under construction here, it’s not happening fast enough. There are only 1,479 new build, single-family homes on the market, BILD said, or 4½ months of inventory. The industry considers a “balanced” inventory – one able to meet demand – at 9 to 12 months.
“We’re really seeing some challenges with respect to meeting the demand for low-rise” said Dave Wilkes, president and chief executive officer at BILD.
Townhomes by U.C. Towns continue to undergo mid-development stages on Thoroughbred St., in Oshawa, on July 10.Shay Conroy/The Globe and Mail
High interest rates take some of the blame. In addition to hiking mortgage rates, they make it harder to secure construction financing – which feeds into higher prices for home buyers.
“We don’t have room to drop the price of our homes because the interest on construction loans are so much higher than they were a year ago,” said Gus Stavropoulos, president of Tribute Communities, which is building one of the developments at Conlin and Harmony. “We have to raise prices just to keep pace.”
Availability of land is also a challenge. Prime areas for development in the Greater Toronto Area are bounded by Lake Ontario to the south and the Greenbelt to the north, east and west. There is potential in land outside municipal limits (dubbed the “whitebelt”) but bringing this area into the fold requires rezoning and expensive infrastructure construction.
Paradise Developments is one of several new subdivisons being built just off of Conlin Rd E and Harmony St N.Shay Conroy/The Globe and Mail
“If you can’t get toilets to flush and get the services there, you’re not gonna build a brand new sub-division community,” said Mr. Stavropoulos.
Infrastructure funding is required by all levels of government, he said.
And overhanging the building industry is the challenge of an aging labour force, especially in the skilled trades like plumbers and electricians.
There is no easy fix.
“They’re getting hit from everywhere,” said Mr. Stavropoulos, noting that higher prices crimps sales, which in turn depresses construction. “Until we get a little bit of an equilibrium going there, we’re gonna have this problem.”
The developments of several recent home builders in various stages can be seen in every direction at the corner of Harmony Rd N and Conlin Rd.Shay Conroy/The Globe and Mail