Toronto’s Detached Homes and Condos Price Difference Now Largest Ever

Toronto’s Detached Homes and Condos Price Difference Now Largest Ever

The Price Gap Between Condos and Detached Houses Has Widened in Toronto

According to the Toronto Regional Real Estate Board (TRREB), the price gap between detached homes and condo apartments in February 2021 was slightly wider than its peak in February 2017: $1,062,032 versus $1,058,198. 
As the price of detached houses continues to rise to increasingly-unattainable heights, a growing number of would-be first-time homebuyers remain stuck in the rental market, or left to turn to the next best thing on the ownership front — condos. 
The gap between the price of a detached home and a condominium grew larger to the point that a family or a person who’s a first-time homebuyer, looking to get into the market might have more interest in condominiums.
With the GTA’s housing market known to be in short supply — especially for detached homes in Toronto’s core — and sky-high prices that far outpace incomes, it’s no doubt that more kids will be raised in condos in the coming years. Developers are adapting, with large condo units in multi-faceted buildings — or vertical communities — that come with a ton of family-friendly amenities, from play rooms for kids and pods for teenagers, to an abundance of green space and pet runs. 

Buyers only Have so Much Money to Spend, so They Will Buy What They Can Afford

We saw this happen when the government changed the mortgage rules a few years ago. Buyers couldn’t qualify for as much money as they had in the past so it forced more buyers into the condo market.
The price to purchase a place to call home in the GTA — whether a condo, townhome, or detached house — will only continue to rise. The consensus among experts is that we won’t see a dramatic bubble burst and subsequent drop in home prices. This is especially true once the country begins to finally recover from the seemingly never-ending pandemic. 
We have some 750,000 foreign students typically studying in Canada and they are coming back as the federal, provincial, and municipal governments begin their re-opening plan. 
People who snapped up properties were first-time homebuyers and investors in 2020 when others were running scared and selling their highly leveraged properties. In 2021 we saw the most amount of sales in TRREB's history at 121,000 sales and people investing in real estate to earn more income accounted for 42% of the total sales.
Prices in the surrounding areas of Toronto skyrocketed due to people who left the city during the pandemic to find more space. This is especially true for the Durham Region, who seen a 90% increase in the price of homes over the last 2 years. Clarington, Oshawa and Whitby were the top 3 cities that have seen the highest growth and are now out of reach for most first-time home buyers. 
With the price of condos predicted to climb — rendering ownership now is becoming increasingly important as Toronto condos hover around $1300-$1450/ sqft. This gap will eventually close and the city will continue to move in the direction of Manhattan on the affordability front, we will see the stigma surrounding renting continue to decrease in Toronto.
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