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Short list rivals undercut Toronto on housing

Monday, January 29, 2018

Toronto brings some of the steepest housing costs to the bid for Amazon’s second headquarters. A overview of December 2017 median list prices among the 19 American contenders reveals a wide gulf between New York and every other market, while Royal LePage’s fourth quarter 2017 sales statistics suggest Toronto is relatively matched with Los Angeles as the next most expensive cities on the short list.

The median list price in New York increased 8.5 per cent over the course of 2017, to reach US $1,244,509 (CAD $1,530,746) in December. Los Angeles saw 5.3 per cent growth in the median list price during the same period, taking it up to US $699,900 (CAD $860,877) by year-end. All other short list rivals posted lower median list prices than Toronto.

Toronto-to-U.S. comparisons are somewhat imprecise since Royal LePage cites actual sales values, but the median house price in the Greater Toronto Area was pegged at CAD $837,873 (US $678,677) at the end of 2017 — up 14 per cent since the fourth quarter of 2016. This aggregate number hides fairly significant price variance across the GTA’s many sub-markets, and between single-family and condominium dwellings.

At the high end, the median price for a standard two-storey house was more than $1.2 million (US $988,000) in Toronto, but less than half of that, at $560,000 (US $453,000) in Oshawa. The GTA-wide median for a standard condominium unit was $476,421 (US $386,000), ranging from $516,000 (US $418,000) in Toronto to $287,000 (US $232,000) in Oshawa.

After Los Angeles, reports a median price of US $550,000 (CAD $676,500) in Washington D.C. and US $534,659 (CAD $647,000) in Denver. At the low end, the median list price was US $170,900 (CAD $209,000) in Pittsburgh and US $210,000 (CAD $258,000) in Indianapolis last month.

Only three of the 49 Canadian markets Royal LePage analyzes — Moncton and Saint John, New Brunswick, and Trois-Rivières, Quebec — posted lower median prices than Pittsburgh. Another four — Charlottetown, Prince Edward Island; Fredericton, New Brunswick; Sherbrooke, Quebec; and Windsor, Ontario — were more affordable than Indianapolis.

“From a housing perspective, Pittsburgh, Indianapolis and Raleigh, N.C. all offer relative affordability and less inventory constraints,” observers Javier Vivas, director of economic research with “New York, Los Angeles, Denver and Boston are markets that have already seen a fair share of growth and inventory challenges.”

Meanwhile, growth and inventory challenges define Toronto’s housing market. “We see demand coming from three predominant categories: peak millennials, who are now at the age of home ownership; immigration; and the somewhat less talked about interprovincial migration of households to British Columbia and Ontario from other parts of the country,” says Phil Soper, president and chief executive officer of Royal LePage.

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