The State of the Resale Housing Market in the GTA

Following up to a post from January of last year, I wanted to publish an updated article covering the state of the resale housing market in the region as of April 2019.

The first chart, immediately below, shows the average resale price of all home types by region for every month since January 1996.


Many are well aware that resale house prices peaked in Spring of 2017, and following the introduction of the Fair Housing Plan and the Stress Test, have come down quite a bit since then. However, not all regions and housing types faced the same change in values since 2017.

For example, the chart immediately below shows values for Condos and Ground-Related homes (i.e., singles, semis and townhomes), and what we clearly notice is a diverging trend since Spring 2017. And unpacking new construction vs. resales is worthwhile here. Very little new low rise product is being brought to the market, while the pre-construction condo market has lately experienced robust growth and rapid price appreciation. For example, $ per square foot values of $1,000 to $1,500 is not uncommon to see in Downtown Toronto today for new construction condos.


Turning to changes in resale house values by geography, what we see in the chart below is that York and Simcoe Regions faced the brunt of the declines (since April 2017), while Peel and Toronto continue to exhibit relative resilience.


However, there is a very important caveat here – it is ground-related housing that faced the biggest declines in York (and in other regions) – as shown in the chart below. Condo values in York are actually up since 2017 peak, and just slightly higher than the GTA average.


Turning towards Months of Inventory (which is determined by dividing active listings by sales in a given month, and generally shows how long it would take to sell current homes if no other homes came on the market), what we see is quite a divergence between condos and ground-related homes, particularly since the great recession. Although MOI generally declined between 2012 and 2017 for both housing types, the market for ground-related product was evidently more robust than condos. Since Spring 2017, there has been a reversal, with the condo market leading the way.


When you break down MOI by geography (for all housing types), once again, York and Simcoe Region come up as the laggards since Spring 2017. What I found particularly interesting about the chart below is how Simcoe deviated significantly from its historic MOI norm between 2015 and 2017.


With respect to sales levels, some very interesting findings are evident between condos and ground-related housing from the chart below. What is clear (and shocking) is how ground-related 2018/2019 sales levels have been sent back to the late 90s/early 2000s! Condos on the other hand are currently exhibiting sales levels similar to those of 2013/2014.


Finally, I want to turn my attention toward monthly change in average house price by type for every region since Spring 2017. What I see is remarkable stability in house values over the last 1.5 to 2 years.

The first chart immediately below shows monthly values of ground-related housing since March 2017. What is clear is that following that immediate major drop during the Spring/Summer of 2017 (between April and August) ground-related house values have been very steady. For instance, ground-related homes in Toronto and York Region have not fallen below the $1M threshold; in fact, you have to go back to winter and spring of 2016 to see average ground-related values of less than $1M. Similar trends are evident in Halton, with homes not dipping below $900,000, and Durham and Simcoe, where homes stabilized around $600,000 since Spring/Summer 2017.


And condo values, which are shown in the chart immediately below, have in some cases actually increased from their Spring 2017 levels.


If you need further proof of the stability present in our market (and in some cases a recovery), the chart below shows it quite clearly. What is shown is the difference in change in all house values (in %) between the immediate drop in 2017 (April to August) and the drop from April 2017 to today (as of April 2019). What I was interested in finding out was – did prices continue to fall following the first immediate drop in values in 2017. What we see is that all regions with the exception of York and Halton have been recovering from that immediate drop during 2017, with Toronto and Peel running away with it.


Some key takeaways:

  • The resale market has exhibited a remarkable level of stability since Spring 2017 (when we look at home values for both condos and ground-related product)
  • The only real concern (for the resale market) I would note are relatively low sales levels for ground-related housing, which could impact prices – but so far this has not proven to be the case, as ground-related values have been very stable for almost 24 months straight. We have actually achieved the policy-makers long awaited dream of a soft-landing in the housing market (even though that was primarily the intent of the Fair Housing Plan).
    • And this could be a good thing as it helped ground people (pun intended) in recognition that home values cannot and should not be going up 20/30% annually. That is not healthy for anyone and won’t end well for those who purchased at peak
  • The other concern for the market may be prices of new construction condo units – but this is something not covered in this article.

Last year I ended off my post by emphasizing confidence in the long-term trajectory of the Toronto region. I still remain bullish. However, I also noted that I was unsure what step the market would take in the next 5 to 10 years. And I’m still not sure, especially given the recent macro-economic climate and what happened to the stock market and equities during late 2018. But after tracking TREBs data since Spring 2017 and seeing the stability in resales month after month, I feel more confident today than I did during January 2018 in our resale market for the short to medium term.

Have questions about the market, want to see custom-run data-sets, or wondering where and what to buy/sell or lease? Do not hesitate to reach out here for more information.


Comparing GDP growth across different geographies

City of Toronto’s Data, Research & Maps web page consists of a treasure trove of interesting data and information about the city.  The Economic Indicators & Labour Force data contains detailed information about Toronto’s (and the surrounding regions) components of Gross Domestic Product (GDP) between 2011 and 2016. I decided to chart some of the data to measure and compare the economic performance of the City of Toronto to the broader Toronto Census Metropolitan Area (Toronto CMA), Ontario and Canada.

The first chart below shows GDP (in $1,000) for the regions since 2011 –

GDP 1011 - 2016

The interesting takeaway from this chart is that the GDP of the Toronto CMA has surpassed the rest of Ontario (outside of the Toronto CMA) in 2016. As of 2016, the population of the Toronto CMA accounted for 44% of Ontario’s population. This is a small indication that the Toronto CMA is more productive economically than the rest of Ontario.

The next chart shows GDP growth (%) between 2011 and 2016 –

GDP growth 2011 - 2016

The most interesting finding gleaned from the chart above is that the GDP of the rest of the Toronto CMA grew faster than the City of Toronto itself – something I would not have predicted given the strong urbanizing effect of job growth in Downtown Toronto over the last few years (as identified in the recent and informative Neptis report, Planning the Next GGH; as well as in Toronto’s Employment Surveys). However, I am certain the numbers would differ, especially for the City of Toronto had we the GDP data to 2018. The rest of Ontario (outside the Toronto CMA) has faced the weakest economic growth, with GDP declines in 3 of the 6 years analyzed. The Toronto CMA experienced a GDP growth rate of more than double that of Canada since 2011 (falling oil prices in 2014/2015 had quite an impact on Canada’s economy). It would be interesting to measure the GDP of the other big cities in Canada to determine whether the economic growth of urban regions is surpassing national growth (might be a topic for the next blog post).

And the final chart shows Year Over Year GDP Growth since 2011 –

GDP YoY growth 2011 - 2016

The most interesting takeaway from the chart above is a trend showing some sort of spatial trifurcation of GDP growth since 2013, with GDP growth strongest in urban regions, steady in Ontario as a whole, and weakest in less urban areas and across all of Canada. This brings into mind an interesting study done in the US by Zillow from 2016, where the researchers found that nationwide average home values in areas considered more urban were higher than home values in suburban or rural areas.

I would be curious to assess the GDP data to 2018 to compare growth between the different geographies and especially the City of Toronto and the rest of the Toronto CMA, and determine whether this recent trend of agglomeration economics has intensified. My prediction is that it has given the “hyper-concentration” of job growth in Downtown Toronto over the last few years.

Comparing homicide trends in US and Canadian Cities

Following up to my earlier post about crime trends in Toronto, Montreal and Vancouver, I was curious to see how the three biggest Canadian cities compare to their US counterparts with respect to homicides. The reason I focused on homicides here was because of the consistency in data reporting (i.e., it was difficult to find consistent data between US and Canadian cities on total crime, including violent and property crime).

The findings in this article show a fairly stark difference with respect to homicides and homicide rates between US and Canadian cities.

The first chart below shows total homicides annually in the four biggest US cities (i.e., New York, Los Angeles, Chicago and Houston) since 1985 –


And the next chart shows the homicide rate per 100,000 residents for the same four cities –


What we see is a persistent decline in crime since the 1990s, with an uptick in some cities since 2014 – notably Chicago. New York City for instance has done a fantastic job in repressing crime over the last 20 years. Here is an interesting article from City Lab that speaks to crime trends in US cities.

The chart below shows total annual homicides since 1985 with the three largest Canadian cities added –


And in the next chart, the homicide rate per 100,000 residents of both US and Canadian cities is shown  –


Although it’s not a big surprise to many, it is clear from the two charts immediately above that the biggest Canadian cities are substantially safer than the largest cities in the US when it comes to homicides. Some interesting facts:

  • In 4 of the past 33 years, Toronto has exceeded 100 homicides; for Montreal it happened 6 times since 1985. Vancouver never surpassed 100 homicides
  • Houston is the only city (of the 4 largest) that has experienced less than 200 homicides annually; it happened one time since 1985 – in 2010
  • Since 1985, the 3 largest Canadian cities have never exceeded a homicide rate of 5 per 100,000 residents
  • New York is the only city analyzed here that has experienced a homicide rate of less than 5 per 100,000 residents; a consistent trend for the city since 2013