Report shows decade of steep growth in GTA home prices
Homeowners in the Toronto region, including the Hamilton and Burlington
area, have more than doubled their investment over the past decade, says
a report issued by Re/MAX on Wednesday.
The report shows the average price in the Greater Toronto Area grew by 119 per cent between 2007 and 2017. Prices appreciated 110 per cent in the Hamilton-Burlington area during the same period, putting those municipalities at the top of Ontario’s six strongest markets.
The steepest climb in both those markets have occurred since 2015.
Ten years ago, the average GTA home price was $376,236. It was $822,681 at the end of last year.
In the Hamilton-Burlington area, prices went from $274,798 on average in 2007, to $576,418 last year.
It’s been an extraordinary run buoyed by population growth, low interest rates and high employment, said Re/MAX Integra executive vice-president and regional director Christopher Alexander.
But even though the economy remains strong, he’s not predicting the recent ascent will persist.
“I just don’t think it’s going to be comparative to the last five years. I think we’ll have more healthier appreciation — anywhere between 2.5 per cent to 7.5 per cent is healthy,” he said.
The report shows that home-buying needs to be viewed as a long-term investment, said Alexander.
“It’s not like a stock or a bond that you can buy one month and a couple of months later you flip it for a profit. It’s something you really need to hang on to a while to realize the maximum amount of return,” he said.
Ontario’s other top markets include Kitchener-Waterloo, where prices climbed 81 per cent over the last decade; London-St. Thomas, with 63 per cent price growth; Windsor with 62 per cent and, Ottawa with 44 per cent.
The hot Toronto area market has rippled into other communities, says the Re/MAX Decade in Review. But the equity gains that helped people move up in the market have also brought affordability challenges.
Would-be homebuyers who can’t afford Toronto’s high prices can still find more entry-level-friendly markets in Ontario, said Alexander.
If you can find a job in the Ottawa or London area, prices there are still below $400,000 on average. In Windsor, the average price is $264,750.
“There are still bargain markets out there but the closer you get to the GTA the more expensive it is,” he said.
The housing gains have persisted almost uninterrupted over the last 20 years despite some serious challenges, notes Re/MAX. Its report cites the 9/11, SARS and the 2008 financial meltdown.
After posting record gains in 2007, the global economic crisis led to a slack nine-month market but by April of 2009, housing was gaining strength.
The “feeding frenzy” in real estate of 2016 and 2017 is over, says the report.
“Multiple offers still occur, but only on well-priced properties in hot pocket neighbourhoods,” it said.
Toronto, particularly south of Highway 401, remains a seller’s market, says Re/MAX, “while more balanced conditions have emerged in the 905 area code.”