The History of Home Prices in Toronto

A few generations ago in the halcyon golden age of 1950s prosperity in Toronto, family homes were incredibly cheap. With newfound post-war home loans for returning GIs, abundant land for development, and a rip-roaring economy, young couples were blessed with plentiful real estate opportunities. The disparity in prices to what is considered average today is mind-boggling. Using the handy Bank of Canada inflation calculator, this blog post will outline decade by decade house transactions to show the state our prices over time. 

Late 1950s

A couple buy a home in midtown Toronto for just over $30K, adjusted for inflation this comes to $130K in today’s dollars. The house is two stories, detached, in a fairly large lot in the Davisville and Yonge area, and considered suburban at the time. (The area of Forest Hill was developed in the 60s and 70s, and was well outside the city’s limits at the time). The house was sold a few years ago for $1.6 million, more than 50 times the purchase price. At the time, a $30K purchase was considered high end, given normal suburban homes in North York, East York, and Scarborough averaged $15-17K at the time. Bidding wars were unheard of, paperwork was minimal, and property taxes were low. 


By the late 1960s home prices had risen, but modestly. The average price was in the mid 20K range, or 180K in today’s dollars. Couples could buy comfortable family homes just outside the traditional city core for prices in the high 20K range. Price increases were much more modest and organic then the fluctuations we’ve seen in the last 10-20 years. At the time the economy was not as financialized as it is today, and credit and money supply growth was much more constrained. Throughout the 1960s, homes generally sold for less than 200K in today’s dollars. 


A similar picture as the 1960s, but with slightly stronger price growth and some fluctuations. Average prices were in the 30-40K range. 


The financialization of the economy took off in the 1980s, and loosening credit and a big stock market boom stimulated a concurrent real estate boom. The late 80s boom was felt worldwide and in almost every economic indicator, Toronto real estate saw incredible growth in that time. But it all ended in 1989. 

90s and transition to 2000s and present

The 90s were a difficult time as interest rates were very high and the bursting of the 80s bubble took its toll. Only by the late 90s, as rates had come down, the dollar had gone up, and prices had recovered, did the seeds of our current boom truly begin to sprout. The rest, as they say, is history. Only 2007-2009 saw a slight blip in the pace of price increases, the rest of the period from the early 2000s to the present has seen rapid price growth. 

Canada’s real estate reliance

As our nation celebrates 150 years of straddling the world’s stage, Tembo has decided to prepare a blog outlining how important the real estate sector has become to our national economy and prosperity.

Historically, the bedrock of the Canadian economy has been primary resources. The cycle has been simple. A resource is discovered or harvesting begins, within a short period of time extraction then begins to boom. The boom provides wealth and opportunity and attracts migration, and then the process matures, the resource declines in value or is depleted or made obsolete by market changes: thus paving the way for a new staple to be collected. The first of these resources was Atlantic cod in the 15th century, then fur and pelts, then lumber, and eventually, minerals and oil by the end of the 19th and early 20th centuries.

By the end of the Second World War, the Canadian economy began to aggressively industrialize and the service sector began to grow expansively. Suburbia sprouted and real estate began to boom and grow as a major sector. From the late 1970s to the present, the post-war industrial components of the economy have gradually withered away. Manufacturing has especially declined in southern Ontario, due to higher costs, relentless foreign competition, and a decline of productivity and innovation.

High oil prices from 2003-2015 helped the economy boom, but as those prices collapsed real estate has taken oil and manufacturing’s place as the main economic engine for the country. Statistics show that most of the strong economic growth the country is currently experiencing comes from four major sources: finance/insurance, real estate/rental/leasing, construction, and professional/scientific, three of these four are real estate related. Manufacturing, farming, fishing, and forestry were sources of economic contraction. Without real estate, Canada would be in a recession.

Businesses are pouring money into real estate and new construction is soaring, while renovation activity is also growing strongly. Increases in housing wealth and home equity are also prompting consumers to borrow more money, spend more, and even leverage the purchase of vacation homes or homes for rental income and investing. Real estate has become so robust that recently, the national housing agency, the CMHC (Canada Mortgage and Housing Corporation) declared it would transfer a special $4 billion dividend to the Federal Government over two years. Soaring property transfer and land taxes are one of the main reasons the deficit prone Ontario Liberal government recently tabled a balance budget for the first time in over a decade.

Overall, the importance of construction, housing, and its financially related business has never been more fundamental to Canadian governments, consumers, and households.

Land values surging in the GTA

In another sign of how strong and resilient the GTA’s real estate market is, housing suppliers are having trouble accessing land to build properties on because of incredible competition and strong demand from builders, developers, and construction companies. The cost of a single-family lot in a cheaper Toronto neighbourhood now averages some $500,000.00. Similar lots outside of the GTHA could cost from $100-150,000.00.

Government thirst for tax revenue has also increased land prices as development charges and fees have been steadily increasing over the past several years. While Toronto development charges are fairly low for regional standards, averaging roughly $25,000.00, other municipalities more dependent on real estate and development for their revenues charge much higher fees than Toronto. Prices for commodities such as concrete have risen, along with the costs of skilled labour, which are in very high demand, particularly in the condo construction side of the market.

While the prices of most housing continue to increase, albeit not as aggressively as before the government implemented a 15% foreign buyers tax and Home Trust ran into trouble, land prices are continuing to increase rapidly.

Land prices won’t be coming down anytime soon. The government of Ontario has been implementing comprehensive policies to restrict land for agriculture and greenspace for many years now. The hallmark policy along these lines has been the famous Greenbelt, which locks out housing development from a massive belt of land on the outer periphery of the Greater Toronto and Hamilton Area. Additionally, the government is imposing new rules on developers and builders, forcing them to build a greater proportion of residential housing in existing neighbourhoods as opposed to new subdivisions.

Farm land values in Ontario increased by over 155.5% from 2005 to 2015. This was the second highest increase in value in the country, overtaken only by Saskatchewan, where prices increased by over 200%. The average price of an acre of prime southern Ontario farmland is now just over $10,000.00.

Neighbourhood features that’ll boost your sale price

As Tembo Financial has previously noted, this is the best sellers’ market in southern Ontario history with record prices and demand. Homeowners who are selling now are seeing massive gains. Although the strong, healthy market is a foundation of high prices, Tembo has prepared a list of neighbourhood features and amenities you should not overlook when considering selling your home.

  1. Community associations: Neighbourhood watches, volunteer networks, and keeping clean programs create a strong sense of cohesion and respectability for a home. Being a part of a healthy, united community improves safety, comfort, trust, and will certainly make a home much more desirable.
  1. Upgrades to come: Do your research and check with local authorities. Public works projects and neighbourhood improvements take years to fund and build. Find out if a new road is being built in your neighbourhood, or if that future subway stop will be close to your home. New streetscaping initiatives or a new retailer will add value and should not be overlooked.
  1. Retail access: Proximity to shopping and services is important regardless of where one lives. Proximity to a bank, grocery store, or post office will add huge value to your home. Appraisers pay close attention to what’s close so ensure that you’re aware of all the retail opportunities your close to, and new ones that are on their way.
  1. Walkability: Being able to walk to a small corner store or an LCBO will help you get good value on your house. Walkability is very important for a buyer, and being able to walk for your basics will have a hugely positive impact on the desire to buy.
  1. Historic and vintage properties: Learn he history of your neighbourhood and discover what sets it apart. Historic districts cannot be replaced, they are incredibly powerful in attracting soul and charm to an area. Having a historic or vintage home nearby can potentially accelerate the increase in the value of your property and will be a huge selling point for your realtor.
  1. Parks, trails, and off lease areas: A no brainer, but a green patch to decompress is something we all need and should be close to. There may be a dog trail or off leash area around your home that you are unaware of or that you have not visited, especially if you’re not a pet owner. These assets can be a huge plus to people with furry members of their family.

Always keep in mind that there could be hidden gems that will give your property an edge or that will justify an even bigger listing price. Have you sold your home, and now can use an advance on your equity before closing day, perhaps you need money for renovations?  Tembo Financial can help!  Tembo offers this unique service to homeowners in Ontario and the GTA. You could receive your money in as little as 48 hours with no credit check and no appraisal* for expenses that matter to you.  Don’t wait, start today!


*Subject to qualification.