Looking back as future of GTA housing market nears
Looking ahead at the housing market for this year, expectations must take into account how much has changed in the GTA over the past decade. And, most notably, the size of this bustling region.
There are approximately a million more people living here today than there were 10 years ago — roughly the population of Calgary.
The price of housing in the GTA has shot up just as fast as the population, and it’s likely to continue to rise in the decade ahead, creating new market extremes and added complexities for home purchasers.
Ten years ago, a two-storey, fourbedroom detached home in Richmond Hill (2,491 square feet on a 40-foot lot) sold for $430,918. Today, a similarly sized, new detached home in the same market (a rare find) is selling for close to $1.2 million, or almost three times as much as in 2005.
Those looking for ground-oriented housing options today at 2005 prices won’t be looking at four-bedroom detached homes in Richmond Hill. A similarly priced prospect today would be a three-bedroom, twostorey townhouse in Whitby (1,629 square feet on a 20-foot lot).
Amid current mortgage rates and with a 20-per-cent down payment, purchasers seeking an averagepriced, new detached home require combined family income of $174,854. Considering the average household income in Toronto is $107,200, affording a new detached home today requires above-average earnings.
The condominium market is experiencing different dynamics. In 2005, a 979-square-foot, one-bedroom unit in the Downtown West submarket was selling for $349,900. A decade later, a similarly sized unit in that submarket is $644,900, almost double the 2005 price.
If you’re looking for a condo in Downtown West at that same 2005 price point, they do exist, a testament to innovations within the highrise development industry enabling builders to create smaller but more efficiently designed units.
Today, if you want to pay $350,000 for a condo in Downtown West, though, you’ll be in the market for a 623-square-foot, one-bedroom-plus den unit, a decrease of 356 square feet, or the elimination of approximately three 10x12’ rooms.
The province’s pro-intensification approach over the past decade has created extremes in the housing market, underscored by the fourfold growth in the price gap between high-density housing and groundoriented housing.
Unless lessons of the past 10 years are heeded and applied to actions taken today, the future of the GTA housing market is looking taller, smaller, more expensive and more complicated. George Carras is the founder of RealNet Canada Inc. and the president of RealStrategies Inc. His column appears in New in Homes & Condos once a month. For more information, visit realnet.ca or Twitter at @realnet_canada.