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Existing home prices continue to grow in the city with the average price of a detached home up 20.7 per cent in July from a year ago to more than $1.2 million. Across the GTA, existing detached homes are now selling for an average $952,983, while new single family homes have already crossed over $1 million.

The economist took dead aim at the province’s Places To Grow Act which has limited the availability of serviced land for ground-oriented housing and set aggressive intensification and density targets.

Tal says the Greenbelt Plan, which restricts the type of development that can take place in the area that rings the city is one factor but intensification policies might be playing a larger role. The plan mandated that by 2015 and every year after municipalities must make sure at least 40 per cent of new developments take place in current urban boundaries.

Under the plan that intensification can take place through redevelopment of vacant or brownfield land but mostly it has meant development of more dense forms of housing. The province now wants to increase that minimum to 60 per cent.

“The higher the rate is, the less land will be released in the outskirts — adding to the lack of land supply,” says Tal.

Already the land value of low density units is up 100 per cent over the last decade and 150 per cent for medium density lots, which Tal says is the prime target for intensification. In some cities around the GTA, like Markham, Newmarket and Richmond Hill, land costs make up more than half of the total price of a home.