Now here’s a really useful map if you’re thinking about stepping into Toronto’s ridiculously expensive real estate market. TheRedPin.com, a Canadian real estate website that charts property prices across the country, has come up with a visualization of home prices in Toronto, based on proximity to the city’s subway stations.
First of all, it’s worth noting that Toronto’s public transit system isn’t the most extensive. We only have two main subway lines that run through a city with a population of 2.5 million people. Thus it’s fair to assume that property prices near a subway station would be significantly higher than if you’re a 30 minute or more walk away from the subway system.
But it turns out that’s not really the case. Property prices tend to be governed by neighbourhood more than accessibility to public transit. You can get a one-bedroom condo for an average of $150,000 if you’re willing to live further away from the downtown core — granted, home prices are lower in neighbourhoods that haven’t seen significant upgrades in the last few decades.
One bedroom condominiums in the proper downtown core of Toronto, where you don’t need a car because everything is within a 30 minute walk, at maximum are currently in “out-of-reach-for-millennials” territory. Most condominium buildings in central Toronto range are not more than five years old, and tend to be in the $500,000 to $600,000 range.
To some extent, you could argue that these prices are in tandem with downtown Toronto incomes. The average income of an individual in Toronto’s financial district, home to most of Toronto’s service-sector jobs (banks, insurance companies, company headquarters) stands at a healthy $80,000. That works out to a monthly after-tax income of about $5,200, more than enough to afford mortgage payments on a $500,000 condominium.
But keep in mind many people who work in the downtown core don’t necessarily live in the downtown core. In fact, the population of people city’s core is estimated to be only 250,000, a tenth of the overall population of the city. Downtown Toronto is also home to two massive universities — University of Toronto and Ryerson University, both of which have a large proportion of foreign students, many of whom rent one or two bedroom condominiums in the city.
Home prices in Toronto are currently averaging at $863,910 — that’s a slight dip from March, when they were at their highest ever, but still very far away from “affordable” territory, given that the median family income in Toronto is a mere $78,667. The province of Ontario recently intervened in the housing market by slapping a 15 percent tax on non-Canadian buyers of Toronto properties, citing “foreign speculation” as a key reason for the rapid growth in home prices over the last decade or so.
There’s some sign that the market is cooling, but the general consensus is that prices won’t dip significantly until the cost of taking out a mortgage (i.e. interest rates) starts to rise.