Five Year Pay Off

Grading off current performances, one would have to conclude that Toronto’s real estate sector continues to pay off, while Vancouver’s has become a complete bust. If we limit the review to the last year, that would be the case; however, if we extend our judgment over a few years we see high parity between the two cities.

5 Year Price GainsSource: REBGV, TREB, Six Housing Sense

Over the past five and half years, the pay off between the two housing markets is actually now quite balanced. There have been times where Vancouver built large leads over Toronto, but as of last month, the five-year gains in both the detached and condo sectors for each city are almost equal. That said, this has only recently become the case. Even with all the loses from Vancouver this past year, the city’s previous gains were enough to keep it ahead of Toronto until this past spring.

5 Year Price Gains DetachedSource: REBGV, TREB, Six Housing Sense

Vancouver’s detached market rose 74% above January 2014 before falling off to 53%. Toronto’s detached market is also down from its one time high of 68%; however, it now sits above Vancouver at 56%. In comparison since 2014, the two cities had very similar growth paths in year one before Vancouver advanced. Toronto caught up momentarily in 2017 though quickly fell well behind again. With Vancouver’s free fall over the past year, Toronto’s slow but steady growth has put the city marginally in the lead.

5 Year Price Gains CondosSource: REBGV, TREB, Six Housing Sense

Vancouver’s condo market went even higher than its detached sector, peaking at 89% gain over 2014. This pace has slowed recently with the city dropping back down to a still incredible 76% five-year growth. For Toronto, the condo market is at its all time high, and like the detached market, also outpacing Vancouver now, having increased by 79% over the past five years. This marks the first time since 2015 that Toronto’s condo market has outperformed Vancouver’s pricing against January 2014.

With Vancouver’s market receiving only negative attention and Toronto pushing its everlasting strong market message, it is interesting to see that the two cities have actually paid off virtually the same over the past five years. Vancouver is now giving up some of its excessive gains; however, Toronto’s detached market did the same in 2017. Time will tell where each city goes from here. Yes, Toronto looks like the stronger bet, but it is worth noting Vancouver has gone through this before. Prices fell there in 2013 as well, and obviously rebounded very successfully. Could this happen again? And can Toronto actually avoid a downturn forever?

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