Toronto and Vancouver Real Estate Too Expensive? Try Cheaper Markets… Like NYC

Toronto and Vancouver real estate prices are rising because of the growth — it’s the next New York City (NYC)! It’s not hard to come across a comment like that once or twice per day, and we’re sure you all have friends in those cities that say it. Politicians have candidly explained to us it’s not a bubble. Not everyone gets to live in NYC and people should expect the same for Toronto. These cities are for high-performing households seeking opportunity, a city councilor once explained.

Where does everyone that can’t afford to pay the premium of living in such a fantastic opportunity go? We trawled the MLS data, it didn’t take long, and found a place that might work for you. Have you ever considered NYC? It’s more affordable than Toronto or Vancouver, and many say it has as much opportunity as NYC. Heck, if you’re willing to commute 20 minutes, the cost of buying a home is a third cheaper than Canada’s big suburbs. Seriously.

Toronto & Vancouver Homes Sell For Close To C$1 Million

First, let’s look at where Canadian real estate prices are at these days. Greater Toronto’s median home sale price reached C$1,098,000 in April, about 6.8% higher than last year. In the City of Toronto, it was slightly lower at C$980,000, up 12.0% from a year before. The suburbs being more expensive than the city is a recent phenomenon. BMO warns they might be up to 76% overvalued

It’s cheaper than Greater Vancouver, at least. A typical home hit $1,374,500 in April, up 18.9% from last year. In the City of Vancouver, the Eastside (C$1,359,900) and Westside ($1,483,100) are even pricier.

New York City’s Median Home Sale Price Is Less Than C$1 Million

Then there’s New York City, world-renowned for being some of the priciest real estate on any planet. The median sale price of a home reached C$969,000 (US$760,000) in Q1 2022, rising 7% from last year. That’s in New York City, not the Greater Area. That’s comparable to the City of Vancouver or City of Toronto, not the burbs. But if you’re into suburban living, let’s talk about that quickly.

Toronto’s Suburbs Cost 3x More Than New York City’s Suburbs

If you’re in a suburb and willing to commute for 10 to 30 minutes, prices change dramatically. About 20-30 minutes from downtown Toronto, sans traffic, you can buy in Mississauga for C$1,028,500. It’s where the region’s international airport is, and you’re likely to get more bang for your buck. 

In contrast, Newark is a suburb about 20-30 minutes from Manhattan. The median sale price was C$396,416 (US$310,750) in April, falling 4% just in the month. It also happens to be home to one of the region’s international airports. 

Sure, but when you buy into Toronto or Vancouver real estate — you’re buying into an opportunity. Remember, you’re paying a lot more for future potential. What’s that? The gross domestic product (GDP) of Greater New York (C$2.42 trillion) is larger than Canada’s entire GDP (C$2.12 trillion)? Well, damn.

9 Comments

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  • GTA Landlord 6 months ago

    That brings us back to whether or not the world has ever seen such a bigger real estate bubble. This is Dutch tulip-levels of insanity.

    The government also scaled the defintion of “affordable” so paying $36k/year in rent is now considered affordable rents but they used the definition for TOTAL MORTGAGE SERVICING. It’s a plan designed entirely to extract rents at a predatory level and ensurer they can’t save.

    But sure. We don’t need higher rates, just “build more affordable housing.”

  • Ethan Wu 6 months ago

    I don’t even know what to say. Good reality check.

  • Rob Turner 6 months ago

    Toronto isn’t the next NYC. It’s more like Pittsburg, which is still tri-state commuter territory.

    Look at what you get in Pittsburgh for the same prices as a condo in TO.

    https://www.zillow.com/homedetails/1815-Murdstone-Rd-Pittsburgh-PA-15241/11433580_zpid/

  • RM 6 months ago

    This is insane, of course, and having lived in Toronto all my life and spent a lot of time in NYC, I assure you Toronto is not Manhattan. However, in fairness, NYCs property tax is way higher than Toronto (which is absurdly low). That said, if you live in NYC you’re likely going to make double the salary, so there is that too.

    • Trader Jim 6 months ago

      “way higher”

      NYC effective property tax rate: 0.88%, Toronto: 0.60%.

      It’s not insanely higher but the point about Toronto being absurdly low still stands. The City knows they can milk the rest of the country’s income taxes to subsidize its bubble. Same with Vancouver.

      Imagine living in Calgary with double the property tax rate and paying Federal income taxes because the City keeps claiming its broke and needs Federal help? Haha.

  • Sarah 6 months ago

    The comparison is misleading, since the “average” in NYC includes a lot of studio apartments and few (to no) 4-bedroom homes with land, parking, etc. You are not getting much for 760k USD in the 5 boroughs (in Manhattan, maybe a studio apartment in a walk-up), and you’re looking at $1,000+ in monthly maintenance on top of your mortgage and insurance (i.e., sale price alone is not a good indicator of cost). I get that Toronto is out of control, but this is not a fair comparison.

    • NY Realtor 6 months ago

      Not even close to true. There are over 700 single-family listings within 20 minutes of midtown that cost less than $500k. You can easily renovate and have a beautiful place for $600k or less complete with a backyard.

      New multi-family developments in Brooklyn cheaper than Toronto and Vancouver (my family is in Vancouver). If you speak to Canadians, they every reason to believe the issue is everything other than a bubble, because in Canada every home buyer is an investment genius that’s never under or overpaid.

      It’s the most efficient market in the world it seems. Who knew people refinancing the first home they ever purchased to buy a second cashflow negative rental property with no open access to information and blind bidding, acted with machine like efficiency?

    • SH 6 months ago

      Fair point but, in addition to what NY Realtor states above, a quick search on Zillow shows many spacious apartments available at reasonable prices even in Manhattan. Plenty available in the $300-400K USD range for ~600-700 sq ft units, particularly in Upper Manhattan and Washington Heights (30 minute subway ride to midtown, or 45 minutes to Wall Street). Most of them are coops, I realize, which come with additional hurdles for board approval etc, however the main point is that the world’s financial capital offers middle class buyers more in the way of affordable options than Toronto or Vancouver, which is infuriating.

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