It’s no secret that real estate prices in the Greater Toronto Area (GTA) are at jaw-dropping highs. But knowing just how much they’ve risen in the last 10 years may seem downright shocking.
RE/MAX released its Decade in Review Report on Wednesday, breaking down just how much the home prices in Ontario have gone up since 2007.
Christopher Alexander, Executive Vice President and Regional Director at RE/MAX Integra, says the only surprise from the report for a lot of people will be just how many markets saw massive gains in the last 10 years.
The GTA unsurprisingly saw the biggest jump in real estate prices, up from an average home price of $376,236 in 2007 to $822,681 in 2017.
Alexander says that the Toronto area has becoming increasingly attractive to families and new immigrants to the country, which has helped fuel the demand and price increase for the region. It’s also been of interest to foreign investors over the last several years.
“When our dollar took a hit three or four years ago, Canada became on sale,” Alexander says. “Foreign investors began to look to Canada as a save haven for their money.”
The GTA effect on Hamilton
The news may be great for people who purchased homes in Ontario early in the decade, but new home buyers quickly found themselves priced out of the market, forcing them to look outside of Toronto and seeking homes in other cities.
“While equity gains further bolstered the move-up market, affordability concerns emerged,” says Alexander. “Limited inventory was reported in Hamilton-Burlington, Kitchener-Waterloo, London-St. Thomas, Windsor and Ottawa, as first-time buyers, especially those interested in single-detached homes, ventured outside of the Greater Toronto Area.
“At one point, one in every four buyers in Hamilton-Burlington was from the GTA.”
Above average growth
While Toronto led the growth for Ontario, all markets saw growth beyond what is generally expected during the same time period.
“If you’re talking healthy price appreciation, you’d expect two to five per cent year over year,” says Alexander. He adds it’s not concerning to see higher growth than that, until you get into the double digits. The Greater Toronto Area hit that last year, but the foreign buyer tax helped to correct the market and return the GTA to more typical price increases.
Despite the term “bubble” being thrown around a lot, Alexander says that’s not what we’re facing here. He says Toronto and Hamilton have both been on a 20-year price appreciation streak, and Canada is seeing a perfect storm of factors to help the market stay strong.
“There’s just too many external factors [like low interest rates, strong GDP and immigration],” says Alexander. “That will all sustain good price appreciation for next little while.”
Ottawa’s time is coming
Ottawa, which saw the lowest percentage increase over the last 10 years, is set for its own boom soon, Alexander says. He says he wouldn’t be surprised to see another 50 per cent price increase in Ottawa over the next decade.
“I really believe Ottawa is poised to take off,” says Alexander. “It’s much more affordable than some of the other markets in the report. The government is on a hiring hot streak right now, and that really drives market activity there.”
But Alexander stresses that there’s really no wrong answer if someone is looking to buy property in the region.
“Canada is an incredible place to live, especially Ontario, and it will continue to attract people all over the globe. If you’re thinking about getting into the market, now is definitely the time.”