Condo Price Gains in Perspective

Over the past year, the condo segment of the housing market has been driving Toronto price gains. In particular, it has been wildly out performing the detached home sector. As the gap between detached and condo prices closes, increasing rhetoric has been written trying to explain the condo market’s recent success. To better understand this, we set out to look at the past history of the different housing types in the market to see how their performance has historically compared.

Our first table shows the October benchmark price for each housing sector from the past seven years.

Year Detached Semis Townhouses Condos Overall
2012 $672,800 $541,200 $363,500 $307,200 $503,700
2013 $705,800 $562,800 $378,000 $314,700 $523,100
2014 $774,300 $613,900 $408,700 $329,100 $563,400
2015 $885,800 $667,800 $447,400 $346,300 $609,500
2016 $1,020,300 $778,900 $523,500 $387,800 $705,600
2017 $1,088,200 $844,100 $604,600 $485,200 $790,300
2018 $1,109,300 $889,100 $630,600 $538,300 $845,900
Total % Increase 65% 64% 73% 75% 68%

Source: TREB, Six Housing Sense

From 2012 to 2018 the Toronto housing market saw a total increase in prices of 68%. This overall gain has been closely aligned with the advances experienced by each housing segment, as the four housing types ranged from 64-75% with respective returns. Focusing specifically on the detached and condo sectors, we see that the condo market has outperformed the detached by 10% (75% – 65%).

In the below graph we breakdown when these gains were realized over the past six years for all housing types and the market as a whole.

Toronto market comparison
Source: TREB, Six Housing Sense

From the graph we see that the detached housing market led the way with early annual gains above the overall market and the other three segments. The lead continued until 2016 when the overall market marginally outperformed detached homes, an achievement that occurred again in 2017 and last month. Meanwhile, the condo market dragged behind the market and the other segments by a large margin from 2013 to 2015. During these years, condos appreciated only 13%, while detached homes increased 32% in that period and the general housing market was up 21%.

In 2016 we see the condo sector make a strong year-over-year gain, though still trail all other housing types. Finally, in 2017, the condo market led Toronto with an annual gain in October of 25% and remained the strongest performing segment in 2018 at 11%. In total since 2013 the condo market has out-performed detached homes and the overall market, but almost all that success has been realized in the past three years, with condo prices having increased 55% since 2015.

So, while the condo gains have been significant lately, especially in comparison to detached homes, much of that success has merely been condo prices catching up with the earlier success of ground level homes. The benchmark price for condos in Toronto has been essentially flat since the spring, so we will monitor prices to see if condos price run will also be coming back down to earth in the coming months.

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