For Greater Toronto real estate, detached homes are living in 2017, while condos are stuck in 2009. Toronto Regional Real Estate Board (TRREB) data shows home prices increased in February. When looked at in aggregate, the whole market is on fire. Breaking it down, there’s two distinct markets. Detached homes are adding multiple years of household wages, pushing the index higher. Condo apartments are heading the other way, and seeing the lowest growth in over a decade.
Greater Toronto Home Prices Rise $41,000 In February
Greater Toronto real estate prices made a big jump, shows the composite benchmark. The benchmark, or typical home, price reached $969,600 in February, up 4.52% ($41,900) from a month before. Compared to last year, prices are now 14.81% ($125,074) higher. At this rate, the growth is unlikely to stop this month without an abrupt change.
The rate of growth has accelerated to a new multi-year high. The 12-month growth accelerated for an 8th consecutive month. It’s now at the highest rate since July 2017, but it’s important to note this is different from that period. Low rise homes are seeing almost all of the price growth. Condo apartments are seeing growth further decelerate. The City is also growing at nearly half of the pace of the suburbs.
Greater Toronto Benchmark Price
The price of a “typical” composite home across Greater Toronto.Source: TRREB. Better Dwelling.
GTA Detached Home Prices Rise By $62,000
Greater Toronto detached real estate prices are driving the composite’s price growth. The detached benchmark price was $1,196,700 in February, up 5.47% ($62,100) from a month before. Compared to last year, prices are 21.22% ($209,487) higher. Simmer down, we have a lot of numbers to work through.
Like the composite number, this is accelerating into a multi-year high for growth. The 21.22% annual growth rate in January isn’t just more than twice the median household income for the region. It’s also the fastest rate of growth since 2017. The City of Toronto is also growing at a breakneck speed, but it’s about 7 points lower.
Greater Toronto Benchmark Price Change
The annual percent change of TRREB’s benchmark price for all home types.Source: TRREB. Better Dwelling.
Toronto Condo Prices Show Lowest Growth Since 2009
Condo apartments are a different market, and while they had a huge month, they’re barely up from last year. The benchmark price reached $587,700 in February, up 2.12% ($12,200) from a month before. Compared to last year, prices are now 1.38% ($8,000) higher. The monthly increase is big, but it appears to be seasonal. Last year, condos made a bigger monthly price increase. Failing to beat that number, leads to smaller annual price growth.
Greater Toronto condo apartments have seen growth slow to multi-year lows. The annual rate of price growth is now the lowest since 2009, having trended lower for almost a year. In the City of Toronto, condo apartments are officially negative for the first time in over a decade.
Toronto real estate is hot when looked at in aggregate, but there are divergent trends. First, there’s the detached vs condo apartment split. Detached homes are extremely hot commodities, with prices rising 2x median incomes. Condo apartments had a big month, but it was somewhat seasonal. Annual growth for condos is grinding to the lowest level in over a decade.
In addition to the segment trend, is the location trend – the suburbs compared to the City. Detached home prices in the City are fast growing, but underperforming the suburbs. The same trend is seen with condo apartments, even though it’s a slower market. Suburban condos were hit with slow price growth, while the City saw negative growth.
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Seems normal. Wonder what’s going to happen when we need a minimum wage that’s $25/hr to have people work at Starbucks?
Wage inflation by housing values would be the way canada approaches stagnant wages.