Toronto/Vancouver comparison: Shifting timelines

Our last post showed how the major movements of Vancouver’s housing market seem to be repeated by Toronto shortly after. Today we will break these numbers down further and examine how similar the past few years have really been for each market if we remove a nine-month time gap.

The chart below shows the year over year percentage price changes for detached benchmark homes in each city starting in January 2015. 

YoY Van Tor

Source: TREB, REBGV, Better Dwelling, Six Housing Sense

From the two data lines we can see that Toronto appears to trail Vancouver’s major price gains and losses by roughly three quarters.  To better illustrate this point, the next chart shifts Toronto’s timeline by nine months to align with Vancouver. (Vancouver’s data is from January 2015 to the present, Toronto’s is from October 2015 to the present)  

time shift

Source: TREB, REBGV, Better Dwelling, Six Housing Sense

By removing the nine-month time gap we can clearly see how aligned the two housing markets really are. The two lines are nearly perfect matches of each other minus perhaps one observation: Toronto’s market does not perform as well as Vancouver’s. Where Vancouver peaked at a 38% price gain, Toronto’s peak was slightly lower at 33%.  Following that, Vancouver’s accompanying price adjustment stayed in the positive only dipping as low as a 2% year over year gain.  In comparison, Toronto moved into negative territory experiencing a 10% price reduction in April 2018. Toronto is now moving to benefit from the same recovery Vancouver had in winter of 2018.  When the current month concludes we will gain insight into how this price movement faired.  Will it be as strong as Vancouver’s rebound or will it once again fall short in comparison?

This is where Vancouver’s nine-month head start may serve to inform Toronto because after their winter bump the spring, summer and fall months have not been as kind to Vancouver real estate. In July the benchmark price for detached homes finally showed a negative number and estimating forward, using September as guidance for the autumn shows an even bigger drop, a 5% annual price loss for Vancouver.  If this trend moves east, as all other movements have, Toronto percentage growth will peak again this fall only to slow throughout the winter.  If we consider that Toronto has routinely faired worse than Vancouver did, the price adjustments could be worse than the 5% drop we currently see out west.

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