Toronto's real estate market has exploded as home prices have reportedly soared exponentially in the past year.
According to the Toronto Real Estate Board, home prices in the Greater Toronto Area are 22.6% more expensive then they were last year in the same month. The average price of a home in the GTA is now $770,745. Compared to 2016, when the average price was $630,193, there has been a noticeable jump. Additionally, there has been a large decrease in the number of active property listings. This strong housing demand coupled with the decrease in houses available to purchase is the root cause of this price growth. It all boils down to supply and demand.
Here's a look at the Toronto Housing market in 2016 compared to 2017. Created via Piktochart.
(Full link to the infographic can be found here).
Edcyl Jaye Corillo, a 21-year old chef who has been renting in Toronto for a year, has concerns about these rising prices.
"As a young professional, I worry about whether or not I will be able to afford to buy a house in say, five years. Owning property is an investment, and as much as I want to do that, I don't know if I will be able to."
These figures are especially concerning to him because ideally, he would like to continue to live in the city.
"Toronto is an amazing city. You can see so much culture wherever you go. Our subway system is great, and I love the people here. I can see why so many people want to move here."
Corolla (left) with a friend outside a Toronto restaurant.
Young millennials like Corillo are the ones who may find transitioning to Toronto or the GTA most difficult. Older, established individuals who already own property in the city have little to worry about unless they intend to sell. In contrast, most millennials are just beginning their professional careers, and have yet to gain the financial stability needed to afford the cost of living and owning property in Toronto, according to Corillo.
Rez Tan, a 54-year old computer programmer, also has a lot to say regarding this drastic price growth.
Back in 1991, Tan bought a house on St. Clair close to Warden station. It was a detached home backing onto a park with easy access to the subway. She and her then husband purchased the home for about $250,000. Flash forward to 2017: other houses on the same street are now being sold at prices between $700,000 to $900,000, respectively.
"Around four years ago, there was a house (on our street) for sale that was listed at $769,000. One night I saw four or five cars parked outside this house; a bidding war was taking place. After many hours, the house sold for $842,000. This was four years ago. It's worse now," she said. "Our area is incredibly desirable, which makes buying property very competitive. It's why the prices have skyrocketed. It's all of Toronto."
The Toronto Skyline with the famous CN tower.
This proves that old real estate saying "location, location, location," to be true.
"I think that a lot of people are going to have to move out of Toronto," said Tan. "They're going to have to move to places like Newmarket, or Oshawa, where they can afford to buy. And then they'll have to commute to work, which is never ideal, but it will be their only option."
Corillo has a similar opinion. "I think that these rising house prices will end up having a very positive impact on cities farther outside the GTA, like Barrie or Collingwood for example. Everyone will end up moving to cities like those."
So what should be done to change these rapidly growing housing prices? According to Corillo, nothing can be done. "Toronto is a growing city; people are going to move here. I think that all of this is inevitable. It just sucks for the people who may have no choice but to move out because a lot of people love this city."
Tan however, has some different ideas.
"In Vancouver (British Colombia), they just imposed a tax on non-resident buyers who want to move there. I think we should do the same!" The tax was just announced last summer and may have played a part in shifting investor demand from Vancouver to Toronto. Consequently, the Vancouver market has now cooled off. "If we want our prices to lower, we need to follow Vancouver's lead."
For those who wish to stay in the city, renting may be their best option. Corillo, who rents an apartment with two other roommates, is perfectly content as he is right now. "I mean, if I could buy now, I would, but that's not my situation. For now, renting is great. I also think that the crazy prices here have made me more open to the possibility of living in other cities in the future. "
Tan echoes Corillo's statement on renting. "With the way things are going, I think that everyone's going to have to rent soon, especially millennials," said Tan. "And if people can afford to buy here in the city, they'll more than likely be buying condos, and not houses."