What election promises on housing would mean for Toronto and the GTA

The soaring cost of home ownership is a challenge facing people across Canada, arguably nowhere more so than in big cities like Toronto.

From the 1980s through the late 2000s, the price of the average home in Toronto and the surrounding Greater Toronto Area stayed within three to five times the average annual household income.

But since 2010, that ratio has shifted dramatically. The average home now costs nearly 10 times the yearly income of the average household, based on data from the Toronto Region Real Estate Board (TRREB) and Statistics Canada. 

Combine that with the fact that Toronto and the GTA account for one in six seats up for grabs nationally in the federal election and it's little wonder the main parties are trying to woo voters with promises to make housing more affordable. 

Here's a look at what the Liberals, Conservatives and New Democrats are proposing to do about the cost of buying a home, and some analysis from experts about what impact that would have in Toronto's real estate market. 

Both Liberal Leader Mark Carney and Conservative Leader Pierre Poilievre have promised to eliminate the five per cent federal goods and services tax off the purchase of some new homes, but the promises differ. 

The Liberal proposal is limited to new homes under $1 million, for first-time home buyers only. The Conservative proposal would cover a wider range of purchases: all new homes priced under $1.3 million, regardless of the buyer. 

The benchmark price of a typical new condominium in the Toronto region in 2024 was $1,018,170, according to data from Altus Group and the Building Industry and Land Development Association (BILD). 

There are questions about how far either proposal would go toward making the Toronto housing market more affordable. 

GST is not charged on resale home purchases, and resale accounts for roughly three-quarters of the residential real estate market in Toronto, based on resale data from TRREB and new home sales data from Altus Group and BILD over the past decade. 

Steve Pomeroy, a professor at the Canadian Housing Evidence Collaborative at McMaster University, says the GST cuts will help stimulate some new home construction, but says the Liberal and Conservative claims that the move would save new home buyers up to $50,000 or $65,000 off their purchases are not entirely accurate. 

"It's a good 10-second political sound bite," said Pomeroy in an interview. "The reality is it's not going to have that big an effect." 

He says that's because developers build the sales tax into the market price of a new home.

"You negotiate with the builder for a price and let's say you agree to $700,000, which would be a relatively modest condo in Toronto," said Pomeroy. "You don't actually then add the tax on top of that. It's already absorbed in the price, because that's the price you've negotiated."