“With stats from BILD and Altus Group showing 1,880 high-rise Toronto condo sales within the month of August 2016 alone, we decided to look at how condos fit into the mix in the Toronto market, compared to affordability in other cities around the globe,” condos.ca wrote in its report, entitled Comparing Condo Affordability on a Global Scale
. “We compiled the following research and concluded that based on this data, the Toronto condo market is not actually overinflated relative to other major cities. It’s a hot market that’s for sure, but not overheated.”
The report focused on 18 different cities – from Toronto, Chicago, and New York City, to Paris, Geneva, London and Hong Kong – and found that Toronto is on the low-end of cities facing affordability issues for condos.
It was the third most affordable city in terms of average price per square foot (at $518). That’s a relative steal compared to Vancouver ($900), Paris ($1,584), New York ($1,824), and Hong Kong ($3,086).
The agency also crunched the number on condo cost in relation to average income.
“In Toronto, your average condo price is $440,300 with an average income of $49,795, which means an affordability ratio of nine years. This can give us an idea of purchasing power based on how much salary the average Canadian makes each year,” condos.ca said. “Comparing Toronto to Paris, for instance, we see a significant difference in affordability. With similar populations and the same average income in each of these two cities, it’s shocking to see that Paris’ average condo price sits at $1,346,400 with an affordability rate of 27 years.”
Vancouver’s affordability rate is slightly higher than Toronto’s at 15 years, but still a relative steal compared to Rome (17), New York (22), Moscow (40), Singapore (41), London (48), Shanghai (57), Hong Kong (83), Mexico City (101), and Mumbai (196).
Condos.ca concluded that purchasing condos will continue to be a sound strategy for investors.
“The Greater Toronto Area (GTA) is projected to be the fastest growing region of the province, with its population increasing by over 2.8 million or 42.9% to reach almost 9.5 million by 2041,” it said. “With this predicted population boom, condominiums are going to be a much needed source of accommodation, since there simply is not enough land to continue to develop freehold family homes in the downtown core.
“With steady population increase, matched with continuous new development across the entire GTA, we predict investing in the Toronto condo market to be a smart move with lasting value.”
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Think you have it bad in Toronto and Vancouver? One agency show it can be a lot worse in its analysis of condo affordability around the world and concludes investing in Toronto will continue to provide major gains for investors