What’s Better: A Toronto Townhouse or Suburban Detached Home?

By: Jelani Smith, Bay Street Blog

Toronto real estate can be classified as a market of its own, with prices continuing to shatter records, amid low interest rates, and strong demand. Rapidly rising prices have resulted in many first time home buyers to adjust their real estate expectations, and especially their budget.

But it can be done: At the age of 22, I strategically bought my first home in Toronto’s east end, after three years of house hunting within the Toronto and the Durham regions. Many first time home buyers are facing the dilemma of flocking to the suburbs for larger homes – and getting more square footage for their dollar – or to stay within the city.

However, I bought a townhouse in Toronto, instead of a suburban detached home in the 905 for a few reasons:

Pricing

GTA real estate prices are heavily influenced by the area – even different pockets within Toronto vary from the average Toronto home price. For this post, I’ll be using Toronto East and Brampton home prices as an example.

At the time of purchasing my house (January 2016), I had the option of purchasing a detached home with single-car garage in Brampton for around the same price as a townhouse in Toronto. The average Brampton detached home was selling for $606,364, whereas the average Toronto East townhome was being sold for $567,963, according to the Toronto Real Estate Board.

However, there are hidden costs associated with opting for a home in the suburbs – such as higher property taxes. As of 2016, Brampton’s property taxes were 1.10%, approximately 0.42% higher than Toronto’s property taxes. In other words, Toronto’s property taxes are around $420 cheaper for every $100,000 of the home’s purchase price, compared to Brampton.

Toronto has the lowest property tax rates in Ontario, making it easier for many first time home buyers to financially maintain their home.

Functionality

More developers are starting to change the way they design townhomes – making the space more functional, with open concepts. In fact, four-bedroom townhomes are becoming more common, and some townhomes are more than 2000 square feet (around the average size of a detached home).

During my home buying journey, I noticed that the Brampton detached home was around the same size as the Toronto townhome – hence I wasn’t missing out on any living space.

Transportation Costs

The suburbs may no longer seem like a bargain once the transportation costs are taken into consideration, assuming that you’re working in the downtown Toronto area.

From the Mount Pleasant GO Station in Brampton it would cost approximately $9.15 to commute to Union Station (one way), which is around $3.00 more than the average Toronto East GO Station. In fact, I would be able to take the TTC – at the fixed monthly cost of $146.25 – saving around $180/month in transportation costs.

Convenience

Convenience is something that I desire. I enjoy being walking distance to various amenities, transportation stops/stations, and shopping plazas.

There is a service called Walkscore this data can be seen on Realtor.ca, under the ‘Neighborhood’ section in each property listing. It’s essentially a score out of 100, measuring the quality of the amenities and transportation services close by. Keep in mind, a higher Walkscore and transit score is a factor that would benefit your resale value.

The Bottom Line

In general, real estate transactions involve many trade offs. Many first-time (and prospective) home buyers who are in the similar boat as me – to stay in an attached home within the city – or to move out to the suburbs for a detached home?

As the average Toronto detached home hits $1.5 million, many buyers are looking into other forms of housing – and townhouses are becoming an increasingly popular option – as seen in this Zoocasa infographic.

Everyone’s real estate situation is different – a suburban detached home may work best for a buyer who values more space, whereas some other buyers rather be closer to the city, giving up square footage for convenience.

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