This house sold for $111K in 1987, it might cost 10 times that now
Toronto's housing market has changed dramatically
It's never been more expensive to buy a home in this city, especially if that home is a detached house with a yard.
Toronto's housing sales set a record last month, even with the average price rising by 11 per cent. Rising costs and a competitive pool of buyers have made the house hunt challenging — to say the least — for first-time buyers.
Dan Elliott and his partner have experienced the ups and downs of hunting for a first home. They've been looking for nine months, and the search isn't over.
He told Metro Morning part of the experience was about removing "must haves" from his wish-list for potential homes.
"We know that we're not going to find a walk-in closet. We know that more than two bathrooms is not going to be realistic. You have to start crossing off these things," he said. "It hurts at first. But it's the price, I think, to live in the city."
In Toronto, 7,621 houses and condos changed hands, a 21 per cent increase — the strongest February on record.
With so many buyers chasing real estate, prices continued to rise. RBC economists and CMHC analysts have both expressed concern about housing affordability in Toronto, as homes fall out of reach for people with average incomes.
The problem with some first-time home buyers is they will take on a mortgage that is too expensive just to get into the market.
"It gets really dangerous," said Elliott. "We've been good with each other on how much we want to spend and how much debt we're comfortable taking on. It's a debt you'll be carrying for the foreseeable future."
Elliott has bid unsuccessfully on five houses in Toronto, where the average price of a detached house rose 16 per cent to $1.2 million. The pressure on housing prices in the 905 region is just as great, with detached home prices rising 17 per cent to $816,705.
The selling frenzy brought new listings into the market, more than 11,000 across the GTA, but it's still a seller's market, according to the Toronto Real Estate Board. That makes Elliott look at home-buying as bet on the future.
"You do have to see a future where the price will continue to rise, and it is an investment that still makes sense in the long-term," he said.
A not-so-distant past
Elliott's real estate agent, Desmond Brown, said this is not unique in the real estate market in Torotno.
He said an average time to look at houses is about six months before buying. He has had some clients that look at 75 to 100 houses in the city.
"First-time buyers have to sacrifice a little bit," he said. "It's having a tenant. It's about, are you willing to go further out?" he said. He mentioned parts of East York and Scarborough where houses are cheaper than downtown.
Brown remembers his first sale in Toronto. A home on Leslie Street that went above asking — it was listed for $109,000 and went for $111,000. It was his first bidding war.
Similar homes in that area are now listed upwards of $950,000.