The latest release from the Toronto Real Estate Board on sales figures for November wouldn’t have surprised anyone paying attention to the growth trends this year.
The weather might be getting colder, but the housing market in the GTA certainly isn’t, with 8,547 home sales throughout the month, representing a 16.5%increase compared to November 2015.
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It is simple economics really – demand is outpacing supply in the city, and by a large margin, forcing prices up to a level that means many are now looking to the suburbs.
Property isn’t exactly cheap there either, which is why you are seeing more buyer interest in a townhouse in the suburbs.
More Buyers Turning to Townhouses
Townhouses have grown in popularity in recent years for those looking to escape condo life but don’t quite have the finances for a freehold property.
The Toronto Real Estate Board recently revealed that townhouse demand has grown by 15.2% in the 905 regions, with units roughly around $100,000 less than 416-priced units.
Zoocasa agent Carlos Moniz says the increasing popularity of townhouses outside of the city has not escaped his attention. That goes for buyers of course, but also developers.
“Land is very scarce, especially in the city and even into the suburbs,” he says. “So any developers that are buying land now, they obviously want to get the biggest returns they can. What they are doing is building townhouses to maximise their profits. If they buy a piece of land, they are able to put ten townhouses on the same space as three or four detached homes.”
Houses Increasingly Expensive Beyond City Limits
In the past, those electing to move to the suburbs usually did so because family homes were much more affordable. Nowadays, however, double-digit growth in terms of prices has spread way beyond the downtown core. This changes the dynamic for an increasing amount of people, so townhouses are becoming the choice of many.
“Affordability is a huge problem for a lot of people,” says Moniz. “They might dream of having that semi-detached or detached house, but the reality is that as they are saving, the market appreciates in double digits and you’re probably falling further behind. You might put away $10,000 a year in savings, but the market is appreciating by $50,000.”
Consider Commute Times
Of course, the downside of living outside the city is the fact that, for most people at least, you probably work downtown. The dreaded commute is the bane of many a suburbanite, and with most of Toronto’s main arteries only getting worse in terms of congestion, it makes good public transport all the more important. Fortunately, things are getting better in that regard, as Moniz explains.
“One area that I am highlighting is Stoney Creek,” he says. “You have the GO Train there that will be expanding further west, and as that happens it is going to be a very popular area. It’s a great family area but still affordable.”
The GTA is not renowned for its public transport, so it’s good to see that positive steps are being made for the increasing number of people that travel to work everyday from outside the 416. As the ability to commute becomes less of a hardship, more and more developments will be springing up all the time.
“I also like Ancaster and Guelph, you see lots of townhouses being built around the transit hubs,” says Moniz. “Closer to the city you have Mimico, an area where there are tons of townhouses being built. If you get the GO train there you are only two stops to downtown – a commute of 15 minutes.”
That proximity, while convenient, doesn’t come cheap, however.
“Mimico is still in Toronto really so you are looking at Toronto prices,” says Moniz. “If it’s a townhouse where you own the building top to bottom, you are still looking at $800,000. If it is a stacked town you can find them in the $650,000 to $750,000 range. If you are in a basement it would probably be around $550,000 to $650,000.”
Townhouses a Growing Option for Urban Living
For those with a tighter budget, there are plenty of other options when it comes to townhouses. These type of residences are becoming commonplace right throughout the GTA, and because public transport is negating the need to sit in traffic every morning and evening, they will only grow in number as more and more people come round to the idea of suburban living.
“A more affordable area that is being gentrified is Weston,” says Moniz. “The UP Express is the most convenient transit around. I have sold a full townhouse there for $550,000. If you go to Pickering or Ajax – all those areas along the GO Train are building townhouses. I just sold one to a client in Pickering where he could walk to the GO train. Around there they sell around the $500,000 to $550,000 range.”
