Greater Toronto Area
“From 2000 to 2010, the value of residential building permits rose residential building permits rose to just over $77 billion.”
While a surge in new home construction and renovation has buoyed residential housing values across the Greater Toronto Area since 2000, single-detached homes in core neighbourhoods have experienced the greatest pressure on pricing in the past decade. Overall average price in the GTA climbed from $243,255 in 2000 to $431,463 in 2010—an increase of just over 77 per cent (despite an expanded trading area). Price appreciation has been more pronounced in Toronto district’s C01 through 15, E1 through 3, and W1 through 10—where a single-detached home has appreciated by as much as 111 per cent (C11 - Leaside). From 2000 to 2010, residential building permits rose to just over $77 billion—more than doubling values posted in the previous decade. Close to $6 billion was spent on building permits for renovation purposes during the same period, just a fraction of what is actually attributed to renovation spending in the GTA over the past decade. Infill has been a major driver. As such, the landscape of entire communities has changed over the last decade, as larger homes and townhouse developments replace bungalows, storey-and-a-halves, and two storey properties. The trend is evident throughout the Greater Toronto Area—from Oakville to the Beach and all points north. Even the most prestigious addresses can present redevelopment opportunities—the Bridle Path is case in point where many of the smaller ranch-style bungalows sitting on two and three acres lots have been demolished to make way for 18,000 sq. ft. mansions. With a disposal bin on what seems like every second driveway, homeowners have also been on a renovation tear in recent years. Approximately 35 per cent of the city’s owned housing stock (Statistics Canada) was constructed prior to 1970. While maintenance and repair are a given for many, some buyers are taking their homes to the studs. The Greater Toronto Area is growing—and nowhere is that more evident than in the core. Sales of single-family dwellings have increased 54 per cent in the last 10 years, rising from 18,405 sales in 2000 to 28,387 in 2010. Condominiums have been in large part responsible for the upswing in sales – with renewed focus on higher-density development in downtown Toronto. Sales in C01 alone—the vast majority of which are condominium apartments and townhomes—have experienced a 212 per cent increase in the number of units sold between 2000 and 2010. With prices of single-detached product rising across the Greater Toronto Area, condominiums now represent their first step to home ownership. Trendy new condo enclaves have resurrected tired, older communities and given them a new lease on life. King St. West is leading the way, with Queen St. in hot pursuit. While affordability has driven the condominium life s t y l e t o a l a r g e e x t e n t—a f f l u e n t empty n e s t e r s a n d retirees have been drawn to prestige developments in the city, including but not limited to the Ritz Carlton Residences, the Four Seasons Residences, the Hazelton, Shangri-La and the Trump Tower. The most expensive sale – condo or single-family—has been the penthouse of the Four Seasons, with a sale price of $28 million—shattering all existing records to date. And while there are thousands of units coming on-stream in the year’s ahead, absorption is not expected to be an issue. Apartments that are not occupied by end users will likely end up in a rental pool. Vacancy rates in the city are trending lower, population is on the upswing in the GTA—rising almost 10 per cent from 2001 to 2006 and climbing, and new rental apartments are few and far between. The future is bright for residential real estate in Canada’s largest centre. Economic fundamentals remain sound, with GDP growth expected to improve, and employment numbers on the upswing. Interest rates are forecast to remain stable, which should also serve to bolster home buying activity in the months ahead. With inventory levels tighter than usual, continued upward pressure on pricing is a given.