Varun Kohli April 20, 2022 No Comments

March year-over-year real estate figures showed some incredible surges in prices in the greater GTA. In Orangeville, a town of some 30,000 just north west of Toronto, prices for townhouses increased by over 50%. Apartment prices there saw a similar increase, and single family detached homes increased by over 33%. These mammoth increases were replicated throughout Halton, Peel, York, Durham, and South Simcoe County. More affordable townhouses were in much greater demand than single family detached homes – by double digits in some cases.

The average price for a detached home in Orangeville is basically the same as one in Toronto at this point – at almost $1.2M. Condo prices are surging as well, with prices in Oakville up 50% from March of 2021 to just about $500,000 on average. Supplies are starting to pick up too, with listings showing some growth. It’s possible that people are in the mind to sell and cash out now before higher rates may slow the market down or dampen enthusiasm. It will be interesting to see if rising interest rates will start to chew into these massive price increases. For example, an average priced Ontario home at $850,000 bought with a 15% down payment and amortized over 25 years with a variable 5 year mortgage at around 2% today would equate to a $3200 a month mortgage.

The same mortgage with a 50 basis point rate rise means the estimated payment rises to $3,383, an increase of $186 per month or $2,232 per year. Market analysts suggest that the best bang for your buck in terms of a real estate investment at this point would be condos in well run buildings with affordable parking and maintenance fees, as they are ‘cheaper’ to buy into and will appreciate well in the coming years – especially with more and more downtown offices reopening.

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