It never occurred to me that people expect new houses to be built for young people trying to get their first home. When I think of a young person buying their first home, I think of buying a 20+ year old home. New homes are for relatively wealthy people, usually people upgrading for the second or third time.
Many of the 20+ year old homes in the metro Toronto area have been demolished to make way for either condos or mansions. But even if they weren't, the property values are so high that these homes would still be unaffordable. So, yes, new starter homes have to be built for there to be any on the market at a "starter home" price.
I feel like there's a cycle starting here that looks something like this:
"I can't afford to do the thing I want to do most."
"Then do something else."
If jobs in Toronto aren't paying enough to live there, move. Find a job making less money in a place where you can actually afford to live. I understand you may want the lifestyle afforded by being in a big city, but you're not owed that experience.
It is not so much new homes for young people, as increasing housing stock. It does not matter if the new homes are bought by the young, or if they are bought by existing homeowners; who then sell their old house. Either way the effect is an additional house on the market.
I have such a different perspective on this. Based on the zoning policies of the people in places like San Francisco, they are sending a clear signal they don't want me there. They aren't building sufficient housing such that someone like me could afford to live there. So I just don't. If I accept a job there that doesn't cover the rent, that's my fault.
The answer is to flee these places, move on to greener pastures, these are barren.
My second home was new development precisely because it was "easy" to lock in. I hate it. I want to live in an older home. But, when I was on the market for a place in a new area the older homes were going to cash buyers who were paying over the asking price. With new development, you put down a "small" (in terms of total costs) down payment and then get your loan approved. There's no real competition to speak of.
Race to the bottom. This is what millennial are always told. "Well you just need a BEGINNER job, it'll get better". But, there are enough homes for everyone in the country and 20-30 year old homes are fine.
