Here it is, the post you have been waiting for!
At long last we will put to rest the eternal question of who is better – Peel or Toronto.
Now there are those of you who say that there are absolutely better questions than this. We should explore the question of when society will treat all members as equals and move forward in a peaceful fashion to fulfilling our highest purpose.
This is clearly nonsense, compared to the riveting topic of how a semi-detached in Brampton stacks up against a townhouse in Liberty Village.
Now that our priorities are straight, let’s ring the bell and start the fight. It will consist of two bare knuckle rounds, one focused on the number of sales and the other focused on the average sale price.
We’ll use the latest statistics from January, 2015 and compare against what was taking place a year ago, in January 2014.
Round 1 – Number of Sales
There is no question about it, Peel region (the 905 area code) dominated in this round, where we looked at the number of homes sold in January, 2015, compared to the number of homes sold a year ago, in January, 2014.
In Peel, the number of detached homes were up 10% compared to January of last year, semi-detached sales increased by 2.8% and townhouses sold increased by 4.2%.
Compare this against Toronto, where we saw decreases in the same three types of properties. The number of detached homes in Toronto went down by 2% compared to January of last year, semi-detached sales decreased by 3.8% and townhouses sold dropped almost 10%!
Toronto tried to stage a comeback in the final housing category, condo apartments, where the number sold was up 6.2% compared to last year. A good effort, but Peel responded with an increase of over 23% in the sale of condo apartments compared to last year.
When you look at where homes are being sold, there is no question that Peel is on a tremendous upswing, with increases across all housing categories in the number of sales. Toronto has suffered from a lower inventory of homes on the market for quite a while now and it clearly isn’t getting any better. I have personally helped a few clients move from Toronto to Peel, as they just couldn’t find what they wanted (at a price that worked) in Toronto. The increase in condo sales in Toronto is indicative of buyers being unable to move up to the more expensive types of housing on the property ladder. Condo apartments were the only affordable option for many buyers.
Round 1 goes to Peel, with Toronto sitting in its corner, bleeding from cuts, exhausted and the coach shouting it’s time to throw in the towel. (It might be worth mentioning at this point that I gather almost all of my boxing knowledge from Rocky movies I saw as a kid. With that in mind, here is a link to the theme music from Rocky you can listen to as you read about the next round.)
Round 2 – Average Sale Price
This round is where proponents of Toronto bet heavy. We hear news stories all the time about bidding wars in Toronto and how prices for houses in Toronto are going through the roof. Let’s see what the numbers show us.
As expected, Toronto has a much better showing in this round. Toronto posted price gains in the average sale price across all four types of homes.
The average sale price for a detached home in Toronto for January, 2015 was up 7%, with semi-detached average prices doing even a bit better, with a year over year increase of 7.2%. Townhouses stole the show, with an increase of 14.5% of average sale price. Despite the much maligned condo market in Toronto, constantly in the news for being over saturated with too many new builds done and more on the way, even condo apartments showed a good increase in average sale price, up 4.5% compared to last year.
Toronto clearly came out swinging in this round, determined to make up for its embarrassing showing in the previous round. Peel didn’t take the hits lying down and punched back with its own strong showing.
In Peel, the average sale price for detached homes went up 4.2% compared to last year. Semi-detached average sale prices did twice as well as detached homes, going up by 9.4%! Townhouse sale prices were also up more than detached homes, going up over 6% this year. Finally, condo apartments showed an increase in average sale price as well, going up 3.6% year over year.
This round wasn’t as clear cut as the last one, but the judges are going to give it Toronto. With increases of over 7% in three out of 4 housing categories, Toronto has proven to be an excellent investment over the last year. Given the higher price points in Toronto, the percentage increases translate into substantial dollar gains.
The Winner?
At the end of two rounds, with Peel winning the number of sales and Toronto winning the average sale price, it is a tough call for the judges. As with most important things in life, a simple answer is not as useful as we would hope.
If you are looking to buy a home, more sales are taking place in Peel this year than last year, indicating that the Peel region continues to be an attractive place to live. The number of condo apartments sold increasing by over 20% shows that Peel is also seeing more condo buildings being built and coming on the market, welcome news to buyers there who are prioritizing location and finishes over a yard and driveway. Detached homes saw a significant bump of 10% more sales this January compared to last January, showing that for many buyers, detached homes are still affordable in Peel region. This increase in sales is clearly being tempered somewhat by the jump in average sale prices for semi-detached homes in Peel, up over 9%. The fact that semi-detached sale prices went up more than detached sale prices (up 4.2% for detached and 9.4% increase for semi-detached) indicates that more home buyers are being pushed towards semi-detached homes as an affordable alternative to detached houses. This drives the price of semi-detached up more than detached, due to increased demand.
Toronto has remained a difficult market to buy a home, though I have been quite successful with a number of clients. It takes a bit of perseverance and some adaptability, but it can happen! The clear trend downward on the property ladder (detached (-2%) to semi-detached, semi-detached (-3.8%) to townhouse, townhouse (-9.9%) to condo) shows that the average sale price increases is pushing more buyers to compete for the lower priced options. Only the sizeable amount of new inventory on the condo market has kept the market moving.
On the selling side, both Toronto and Peel homeowners have benefited from a strong real estate market. On the low end of the scale, but still at a respectable 3 to 4% growth in average sale price for Toronto and Peel, are condo apartments. In Toronto, the best average return has been on townhouses, up an astonishing 14.5%. In Peel, the best average return was on semi-detached homes, up 9.4%.
In both areas, homeowners have seen a jump in average sale price for all types of houses. This is certainly comforting to buyers who paid a bit more for their home a year or two ago than they had hoped!
As someone who grew up in Peel and who has lived in Toronto for the last 15 years, I’m actually pleased to see that both areas are winners when it comes to real estate.
If you or someone you know would prefer to chat about your home in Peel or Toronto in person, please don’t hesitate to get in touch. I would love to be responsible for what comes next.
Regards,
Jeff