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RISING HOUSING PRICES IN TORONTO: WHAT SHOULD YOU BUY NOW, HOUSE VS. CONDO?

Feb 10th 2019 at 10:38 AM

RISING HOUSING PRICES IN
TORONTO: WHAT SHOULD YOU BUY
NOW, HOUSE VS. CONDO?


The Soaring Housing Prices
There are not many cities in the world that can make NYC living look cheap for
the middle-income group. Places such as London, Hong Kong,and Sydney are
among the top contenders. In recent times, Toronto is climbing up the ladder
pretty fast. Many people even from New York went to Toronto to find cheaper
housing rates. But that is not the case anymore.
In the past five years, the housing prices have soared more than 60% in Toronto.
The rates are not as high as Vancouver but Canada’s biggest city, according to
Demographia, is ranked 5thwhen it comes to the most unaffordable places to live
relative to annual income.
The government has made lending rules even tougher in 2018 and it has reduced
the purchasing power of buyers by approximately 20%.Rents also paint a similar
picture as they have soared by approximately 11% in 2017 as per the data
provided by Urbanation.
The High Demand Of Condos
Due to the climbing housing rates, people were more driven towards focusing on
high-density housing projects. This introduced a new trend of increased demand
for condos in Toronto and the nearby regions. High-density housing projects
turned out to be more feasible for most middle-income groups.
The condo projects are equipped with all the amenities of modern lifestyle and
most importantly they are affordable. For this reason, the condo market has seen
incredible high demand in the past years.
Detached House Vs. Condo: The Price Difference Is
Retreating Fast
The prices of condos are now at an all-time high. In July of 2018, the difference of
average price between a detached house and a single or double bedroom condo
was about $583,000. It was significantly low as compared to the difference in
average prices in April of 2017 which was approximately $762,000.
During this time the real estate market of Toronto was at its peak. It provides us
a minute but important point that the price gap has reduced to a great deal. This
fall is due to the high demand for condominiums as well as the reducing housing
prices.
In 2017, the average cost of a detached house in Toronto city was $1.28 million.
On the other hand, the average price of a condo was $464,200. In comparison to
these figures, in 2018 the average cost of a detached house was $1.12 million and
that of a condo climbed to $530,200.
About seven years ago $530,200 was the average price of a semi-detached house
in Toronto. It is just a little low than one attached house in most suburban
neighborhoods like Brampton, Pickering, Halton Hills and Newmarket with 1-
hour commute to the city.
Future Trends
Condominiums have seen a price surge during 2016 and 2017. During that time
Toronto’s real estate was at its peak. But government interventions have
restricted housing prices. Foreign buyers have to pay 15% tax and there were
tight mortgage criteria as well along with surging interest rates. These
interventions successfully slowed down the soaring prices in the market down.
But there was no negative impact on condominium sales.
Since the introduction of ‘Fair Housing Plan’ of Ontario, the house prices have
dropped by 10% in Toronto. The drop was 20% in the suburbs of the city. On the
contrary, the condo prices have increased 14% and have remained immune to
any interventions from the government. This is primarily due to the ‘relative
affordability’ of condos as compared to houses.
Final Thoughts
According to Jason Mercer, the Director of Market Analysis of TREB, the 2017
bidding wars will make a comeback pretty soon. But at the center will be the
single bedroom condos,not houses. The bidding wars are already on their way in
some of the suburbs of Toronto pushing 1-bath, 1-bed condo price to a whopping
$700,000.
Therefore, this is the best time that you will find to buy a condo due to its relative
affordability as compared to a house that will cost you at least $1.12 million. As
condos have remained immune to government interventions, in the near future
you might end up looking at a double bedroom condo with a price tag of a house
in Toronto.
Artcile resource : https://azuracondovip.ca/rising-housing-prices-in-toronto/
Visit here to know more: https://azuracondovip.ca/

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