Price gap between new houses and condos hits $300K in Toronto
It's a dilemma for young families who want space for kids to run
The gap between the price of new condos and the price of new homes is widening in Toronto, hitting close to $300,000 in February according to RealNet.
RealNet figures show the average price of new detached home or townhouse was $733,578 in February, compared with $442,672 for a condo, a difference of $290,906.
And while the price of a new home is up 12 per cent from this time last year, the price of a new condo has inched up by just one per cent.
"It’s similar to the trend in Vancouver," said Brendan Pyne, RealNet Canada business development manager. “Toronto is 10 years behind Vancouver in terms of the difference in the housing market.”
There is a limited amount of new land for single-family dwellings, most of it in the 905 area, he said.
That’s forced developers to consider high-density development and thousands of new condos are under construction or coming onto the market this year.
"I would say the main factor driving the gap in the Greater Toronto Area is green land legislation that restricts the ability to grow outward," Pyne said.
Vancouver ran into the same limits 10 years ago, he added.
There is intense demand for both new and resale single-family homes, so much so that Toronto real estate prices have continued climbing, even as real estate markets in other cities begin to slow.
The average home price for a detached resale house in the 416 area is now over $1 million and is up 8.8 per cent from a year ago. The average price of a resale condo was much lower at $369,655, a slight decline from last year.
For young Toronto families that presents the possibility that they’ll never own a home with a backyard.
And while detached and semi-detached homes are out of reach financially, condos may not be big enough for couples with children. The average size of new condos is shrinking and currently stands at about 800 square feet, 125 square feet less than they were 10 years ago.