The average house in Toronto is going to cost $275K more in two years
But any hope that the sales market might at some point level out, or even bow a bit to come into line with it and give some people without a mid six-figure salary somewhere in the family tree a chance to buy something in the 6ix were just dashed by the latest housing forecast.
The Canadian Mortgage and Housing Corporation, the crown corporation established after WWII to help returning vets find affordable housing, has just informed us that the average resale house in Toronto will be worth about $275,000 more in 2023 than it was in 2020.
If you wanted to buy a house for $275,000 with a down payment the CMHC says would be prudent, you’d need $55,000 in the bank. The average Canadian in 2018 had $852 in the bank.
But we’re not talking about a $275,000 house, of course. There is no such thing as a $275,000 house in Toronto.
No, the average price for a house of that sort in Toronto in 2020 was $929,673.
That’s not news to anyone here. Nor is the fact that even at the ill-advised but still do-able 5% downpayment level, is just a touch under $50,000.
But what is news is that by 2023, that’s projected to go up to $1,024,700. And that’s the low estimate (the high is $1,205,400).
According to Dana Senegama, the author of the report, that lower forecast is assuming a “prolonged pandemic” due to “lower vaccine efficacy.”
She also says that newly built houses will be rising in price alongside those resale figures.
"With the expected unwinding of the pandemic due to successful vaccination program rollouts," she writes in the CMHC’s Housing Market Outlook - April, 2021, released May 6, "construction activity will gather momentum, and starts should begin to rise in 2022. Strong demand for ground-oriented homes, driven by a greater desire for more living space, will drive pre-construction sales of single-detached homes and townhomes in 2022 and 2023."
The upside to all this building frenzy is that Toronto is getting a lot more dedicated rental housing than it’s had in ages. The downside to that is that Ford took away the traditional rental increase restrictions to any of it that’s built after November, 2018.
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