Rapid population growth, land scarcity and low interest rates fuel exceptional price and sales gains in GTA, according to RE/MAX® Canada Quarter Century Market Report
Average price of a GTA home increased more than 450 per cent, while unit sales have doubled since 1996
MISSISSAUGA, ON, Feb. 23, 2022 /CNW/ -- Residential unit sales in the Greater Toronto Area (GTA) have doubled and average price has increased more than 450 per cent since 1996, as strong demand and limited supply continue to drive rapid price escalation throughout the 416 and 905 area codes, according to a report released today by RE/MAX Canada.
Between 1996 and 2021, more than two million homes sold in the GTA, representing a dollar volume in excess of $1.1 trillion. Average price has soared over the 25-year period, rising close to 453 per cent, from $198,150 in 1996 to $1,095,475 in 2021, at a compound annual growth rate of 7.08 per cent. Statistics Canada reports the Toronto CMA reached 6,202,225 in 2021, an increase of 45 per cent over the 1996 Census figure of 4,263,759.
"Performance of the GTA housing market over the 25-year period has been nothing short of remarkable," says Christopher Alexander, President, RE/MAX Canada. This is especially so when considering this time period was characterized by the tech meltdown of 2000, 9/11, SARS, the Great Recession of 2008, Ontario's Fair Housing Plan and the on-going pandemic. "Many have raised concerns about the future of housing, given population growth and land scarcity within the Greater Toronto Area."
The RE/MAX Canada Quarter Century Market Report analyzed homebuying activity in the nine Toronto Regional Real Estate Board (TRREB) districts that comprise the GTA – Toronto East, Toronto West, Toronto Central, Durham, Halton, Peel and York Regions, and Simcoe and Dufferin Counties – and found land availability, especially in the city's core and bedroom communities, has waned. This, as migration, low interest rates, and affordability continue to play a critical role in the growth of the GTA. Triple-digit increases in sales were noted in Toronto Central, Halton Region, York Region, Simcoe County and Dufferin County over the past 25 years, while average sale prices reached new heights across the GTA, with percentage increases climbing between 1996 and 2021, from a low of 301 per cent to a high of 874 per cent.
New construction has been a significant factor in the sales gains in Halton, Durham, Peel and York Regions, the latter two of which are approaching build-out. Over the years, the 905 communities offered affordable alternatives to those looking to purchase freehold properties. Starter homes on smaller lots attracted many first-time buyers in locations to the west, north and east of the 416 area code, supported by the new and proposed expansion of GO train service and another 400-series highway servicing the GTA's northeast/west corridor. The movement brought new life into older communities, forever changing the make-up of cities such as Milton, Whitby, Clarington, East Gwillimbury and Innisfil.
"If you build it, they will come, and they sure did," says Alexander. "Bolstered by historically low interest rates, a strong economy, grit and determination, buyers both young and old have moved to the city's bedroom communities."
With limited land to build on in the 905, emphasis is now shifting from freehold to high-density homes: condominiums in land-locked Mississauga now represent one in every two sales, while new condominium developments are planned and proposed for Brampton, York Region (transit-oriented communities) and Pickering's City Centre.
Over the past quarter century, vertical growth has played a significant role in rising sales figures within the 416, with condominium apartments and townhomes now exceeding freehold sales in Central Toronto, accounting for 76 per cent of sales, according to TRREB data. With many of the vacant lots, parking lots and smaller commercial/industrial properties bought up, builders and developers are now looking at existing buildings and weighing the pros and cons of demolition. Some have gutted and redeveloped existing structures in prime locations, such as the Imperial Oil building on St. Clair (now the Imperial Plaza Condominiums), the old Four Seasons Hotel, and the Sutton Place Hotel (now a 727-unit residential condominium known as The Britt).
"The GTA's housing stock continues to evolve based on land availability," says Alexander. "Builders and developers are faced with the harsh reality of a land supply-crunch as affordability remains top of mind with the vast majority of buyers. While the preference may be freehold, the necessity to build vertical communities has never been more apparent in a city where the population has grown by two million people since 1996 and is expected to ramp up in coming years."
About the RE/MAX Network
As one of the leading global real estate franchisors, RE/MAX, LLC is a subsidiary of RE/MAX Holdings (NYSE: RMAX) with more than 140,000 agents in almost 9,000 offices with a presence in more than 110 countries and territories. Nobody in the world sells more real estate than RE/MAX, as measured by residential transaction sides. RE/MAX was founded in 1973 by Dave and Gail Liniger, with an innovative, entrepreneurial culture affording its agents and franchisees the flexibility to operate their businesses with great independence. RE/MAX agents have lived, worked and served in their local communities for decades, raising millions of dollars every year for Children's Miracle Network Hospitals® and other charities. To learn more about RE/MAX, to search home listings or find an agent in your community, please visit remax.ca. For the latest news from RE/MAX Canada, please visit blog.remax.ca.
Forward looking statements
This report includes "forward-looking statements" within the meaning of the "safe harbour" provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "believe," "intend," "expect," "estimate," "plan," "outlook," "project," and other similar words and expressions that predict or indicate future events or trends that are not statements of historical matters. These forward-looking statements include statements regarding housing market conditions and the Company's results of operations, performance and growth. Forward-looking statements should not be read as guarantees of future performance or results. Forward-looking statements are based on information available at the time those statements are made and/or management's good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. These risks and uncertainties include (1) the global COVID-19 pandemic, which has impacted the Company and continues to pose significant and widespread risks to the Company's business, the Company's ability to successfully close the anticipated reacquisition and to integrate the reacquired regions into its business, (3) changes in the real estate market or interest rates and availability of financing, (4) changes in business and economic activity in general, (5) the Company's ability to attract and retain quality franchisees, (6) the Company's franchisees' ability to recruit and retain real estate agents and mortgage loan originators, (7) changes in laws and regulations, (8) the Company's ability to enhance, market, and protect the RE/MAX and Motto Mortgage brands, (9) the Company's ability to implement its technology initiatives, and (10) fluctuations in foreign currency exchange rates, and those risks and uncertainties described in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission ("SEC") and similar disclosures in subsequent periodic and current reports filed with the SEC, which are available on the investor relations page of the Company's website at www.remax.com and on the SEC website at www.sec.gov. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made.
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SOURCE RE/MAX Canada
Danielle Scott, APEX PR, [email protected], 416-909-5185; Lydia McNutt, RE/MAX Canada, [email protected], 905-301-5980; Eva Blay-Silverberg, Point Blank Communications, [email protected], 416-505-0627
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