2007 Year of the Condominium - Condominium appreciation outpaces single-detached housing values in key GTA districts in 2007, says RE/MAX
Condominiums experienced unprecedented upward pressure on average price in 2007, surpassing gains reported in the single-detached category for the first time in key GTA districts, including the central core and west end.
According to RE/MAX Ontario-Atlantic Canada, the average price of a condominium rose 12.2 per cent in the central core in 2007 ($327,559 vs. $292,064) while values in the west end jumped 7.3 per cent from $215,036 to $230,749. Statistics for single-detached homes reveal an 11.5 per cent increase in average price in the central core ($910,906 vs. $816,938) and a 6.6 per cent increase in the west ($417,407 vs. $444,945) during the same period.
Condominiums are clearly a viable—and now financially feasible—alternative to single-detached housing. With so many purchasers forced to compromise on their choice of housing, the ever-growing return on investment in the condominium market is proving to be quite the consolation prize.
Despite higher prices across the board—approximately 20 per cent, or 12 of 63 Toronto Real Estate Board Districts, experienced a double-digit increase in average price in 2007—the condominium lifestyle allows purchasers to live in the GTA’s most coveted communities at a fraction of the price of a single-detached home.
The best performing markets in 2007 include top-ranking Bayview Village (C15), leading with a 28.9 per cent increase in average price year-over-year ($241,611 vs. $340,113); Yorkville, Annex (C02) in second place with a 23.9 per cent increase ($494,861 vs. $650,379); and Rosedale, Summerhill (C09) in third place, with values 17.2 per cent ahead of 2006 figures ($462,067 vs. $558,435).
Forest Hill, Deer Park (C03) and Swansea , Roncesvalles , South Parkdale (W01) both tied at 14.8 per cent—$514,823 vs. $604,924 and $246,900 vs. $289,872 respectively—claiming fourth place, while SE Mississauga , Applewood, Rathwood (W14) rounded out the top five at 14.6 per cent ($180,279 vs. $211,185).
Condominiums now outsell single-detached homes two to one in the central core. Condo sales have accounted for an increasing percentage of the marketplace in the central, west, and northern districts since 2005. The trend is expected to continue as affordability levels diminish, particularly in the central core. It’s also important to recognize that the vast majority of these purchasers are end-users and speculation is a rare occurrence in the resale condominium market.
Although they carry some pretty hefty price tags, single-detached homes continued to post solid gains as well, with approximately 21 per cent or 13 of 63 Toronto Real Estate Board districts, reporting increases over 10 per cent in 2007. The best return on investment occurred yet again in proven blue chip neighbourhoods. Forest Hill (C03) led the way with a 17.4 per cent increase in average price in 2007, rising from $849,697 in 2006 to $1,028,960. Leaside (C11), Lansing, Willowdale (C07), and Bathurst Manor, Armour Heights (C06) placed second, third and fourth, with prices rising 14.2 ($791,083 to $922,607), 13.4 ($537,891 to $621,185), and 12.2 per cent ($523,736 to $596,551) respectively year-over-year. Thriving Port Credit (W12) placed a strong fifth with a percentage increase of 11.7 per cent in average price, bringing single-detached housing values in the area to $577,461 from $509,380 in 2006.
When it comes to bricks and mortar, homeownership can be cost-prohibitive. The surge in condominium sales and prices is a glimpse at the future. Not only is the condo lifestyle more widely accepted, it is also highly coveted by many. Location, price, amenities, views, low-maintenance living—it’s the ideal package for a growing number of purchasers. As such, price growth and demand are expected to continue strong into 2008.
This graph bleow shows the average price increase of single family residential real estate from 1981 to 2007 in the GTA, click the graph below to see a large version
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For more information, visit: www.remax.ca RE/MAX Ontario-Atlantic Canada
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