Toronto

Toronto Real Estate Prices Rise More Than Half The Median Wage In A Month

Greater Toronto real estate is now earning far more than most owners could make working. Toronto Regional Real Estate Board (TRREB) data shows home prices soared in March. A typical home saw prices rise by half the region’s median wage in just over a single month. That’s a typical home. A detached home jumped in price by more than the median wage.

Toronto Home Prices Jump By More Than Half The Annual Median Wage… In Just A Month

Greater Toronto real estate’s composite benchmark, or typical, home reached a new high. The TRREB composite hit $1,007,600 in March, up an unbelievable 16.54% ($142,400) from last year. The City of Toronto benchmark hit $1,029,200, up 7.45% ($74,000) over the same period. The city’s price increase is huge. It just looks modest in contrast to the suburbs. 

Greater Toronto Benchmark Price

The price of a typical home across Greater Toronto.

Source: TRREB; Better Dwelling.

The annual rate of price growth is now accelerating for all segments of homes. A typical home across TRREB and in the City both increased by $38,000 over just a month. Many points can be made about this, but the most important is the monthly increase was universal. It didn’t matter if it was in the suburbs or the city. This likely had more to do with the expectations the Bank of Canada has set, than it does with supply.

It’s also worth a quick mention of how astronomically large these price increases are. The monthly increase for a composite (that’s typical, not detached), was more than half the median wage. On an annual basis, it comes in around 3x the median wage. This is an exceptionally strange amount for home prices to rise. It’s more typical of home prices in a country with a banking crisis — not a hot market.

Greater Toronto Detached Home Prices Are Up By Nearly A Quarter

Greater Toronto detached real estate continues to be the main driver of this trend. The TRREB detached benchmark hit $1,246,900 in March, up 23.58% ($235,600) from the same month last year. In the City of Toronto, it reached $1,426,100, up 17.84% ($216,300) over the same period. Almost one-quarter. That’s how much detached prices increased over the past year. 

Greater Toronto Benchmark Price Change

The annual percent change of TRREB’s benchmark price for all home types.

Source: TRREB; Better Dwelling.

Detached homes are the main driver of composite prices, especially in the burbs. Growth has accelerated for nine consecutive months, from an already substantial rate. TRREB detached prices increased $50,200 from a month before. City of Toronto detached prices increased by $63,600 over the same period. The single-month rise clears the median wage.

Toronto Condo Prices Rise Less Than Annual Rent Paid

Greater Toronto condo prices aren’t benefiting from the same national trend. TRREB’s benchmark condo price reached $607,500 in March, up 2.09% ($15,100) from the same month last year. The City of Toronto condo benchmark reached $630,300, up only 0.13% ($4,700) over the same period. Not even enough to cover typical rent, but the growth trend is starting to reverse. The City is even out of its single-month dip into negative territory. 

Greater Toronto condo price growth is accelerating after almost a year of falling. Annual growth is very low relative to other markets, and one month doesn’t make a trend. It’s also worth considering if every market in the country is rising rapidly due to easy credit, this… is not great. The same credit conditions apply to condos in Toronto as they do to cottages in the Kawartha. Low growth would have been even worse in a market with less slack.

Location and segment are two things that stand out in last month’s numbers. Home prices for the Greater Region are getting close to the City. The premium for location is practically drying up, as people cut the urban cord. 

In terms of segments, there’s also a clear trend — condo demand is much softer. Easy credit conditions inflated home prices across the country. Toronto condos prices barely moved. The lack of price movement in this environment indicates prices likely would have cratered in a tighter market. It will be interesting to see how tapering QE impacts this segment over the next few months.

The growth rate for prices is astronomical, and there’s a good chance it will accelerate. Last year home prices slid during May and June due to pandemic uncertainty. Even if prices stall here, a base-effect will print acceleration of annual growth. It may only be technical reasons, but the average consumer won’t understand that. Most will only see home prices are still earning more than they could working.

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10 Comments

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  • Reply
    Bruno 2 months ago

    Canadians, fired from their job making $50k, sitting in the homes they bought for a nickel 20 years ago, while the government gives them CERB and inflates property values by hundreds of thousands per year at the cost of future generations. Life is good if you’re not young. haha.

  • Reply
    Fazid 2 months ago

    Two friends quit their jobs at a big tech company I work at, to be a real estate agent. Starting to see engineers making six figures think selling homes to each other is the future.

    The worse part is I don’t really see that at as a bad decision. How many engineers can Toronto trade for real estate agents? Going to find out, I guess.

  • Reply
    Jimmy 2 months ago

    That’s nothing check out Woodstock.

    30 percent one year growth.

    More than the average family earns in a year in January alone.

    Woodstock is the next New York! 🤣

    Fastest growing market in the world.

    Yahoooooo! Merry Christmas.

    It is amazing that we totally destroyed the future prosperity of our country in a decade and half. Well done.

  • Reply
    World Class 2 months ago

    Interesting that this is coming on the heels of Big Tech in the US saying that they will require people to be increasingly in the office and within a “reasonable distance”. Going to be really hard to justify that 4 hour daily commute to your $1M house in Hamilton – although the QEW is lovely in the summer.

    https://www.bbc.com/news/technology-56614285

    • Reply
      Nassim 2 months ago

      I work for a big US company that said they’ll expect people to come to the office, or have an adjusted pay.

      I was also a remote employee for them before the pandemic. A lot of this has less to do with being a remote worker, and more to do with using the office space. They’re locked in for the next 4 to 9 years in general.

      They’re cancelling new office space left-right-and-centre. They’re still hiring a ton of people, and most new hires won’t be required to go in . They just need to make sure office space is filled.

    • Reply
      Average Man 2 months ago

      Hamilton isn’t even that bad. Hamilton, depending where you are in the city and where you work in Toronto, your commute might only be just over an hour, most of which is on the GO train. I used to commute 90 minutes from Scarborough to downtown on the TTC.

      But these jokers who moved to Woodstock and Muskoka and Peterborough are DONE. Congrats on your sweet new four season cottage, now try paying for it making local money.

      • Reply
        Joe sixpack 1 month ago

        Driving into Toronto from Hamilton and back in the evening is a disaster. If you are driving between into from 7 am to 9 am and out from 3pm 7 pm you are done for. I don’t even the the HOV lanes help much. Just getting out if the 403 or over the skyway into Burlington is a half hour commute. So unless you are in Waterdown any other part of Hamilton is a disaster for a commute. Unless of course you are using the Go train then it is different. Now Express Go bus on the Gardner thats another story, ive been on that during peak hour, I’d definitely not recommend anyone do that hungover and sit on the second level.

  • Reply
    Ashley 2 months ago

    Good incentive to leave a job and become a realtor. I am pretty sure realtors won’t be paying taxes as much as a salaried individual would be paying.
    I would think real estate may become part of the school curriculum from Grade 1 since that is where the future lies for Canada.

  • Reply
    Little Birdie 2 months ago

    “ This is an exceptionally strange amount for home prices to rise. It’s more typical of home prices in a country with a banking crisis — not a hot market.”

    Can you elaborate on what you mean by a country with a banking crisis? Do you mean a country subject to high inflation (or potentially hyperinflation?) Potential demise of financial institutions / high defaults? I’m curious which direction you foresee this going (or if it’s a 50/50 split between crash and inflation)

  • Reply
    V 1 month ago

    The money is being devalued. Excessive printing causes this event. Also Realtor tactics holding offers created buyers over paying by 100’s of thousands. Need better oversight at the BOC and for Realtors playing ” hold the offers” game.

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