Canadian homebuyers are paying large premiums to live in some cities. National Bank of Canada (NBC) data shows most cities are cheaper than the national home price in Q1 2021. Two big exceptions are Toronto and Vancouver, which fetch massive premiums. Let’s take a look at how much more people need to pay in contrast to the rest of the country’s urban markets.
Toronto Real Estate Fetches Up To A 30% Premium
Toronto homebuyers are paying a big premium compared to living in the rest of the country. Buying a single-family (non-condo) home is 30.2% more expensive than the price of a typical home in major cities. Condo apartments are only 2.2% more expensive than condos in other urban markets though.
Considering Toronto is such a large part of the index, it likely skews the whole thing higher. Before accounting for that, it’s a very substantial premium. If you compensate for the index weight, the gap between Toronto and a city like Montreal is even larger.
Condo prices are fairly close to the price of a condo in other parts of Canada. That may say more about the rest of Canada’s markets right now than it does about Toronto.
Canadian Home Buyer Price Premiums
The percent difference in home prices compared to the urban composite index, which is the price of a typical home across Canada. Source: NBC; Better Dwelling.Vancouver Real Estate Fetches Up To A 68% Premium
Vancouver homebuyers pay the largest premium compared to the national home price. Vancouver single-family homes are 68.2% more expensive than typical in Canada. Condo apartments are more modest at a 23.1% premium compared to the national urban condo index. It won’t surprise anyone in Vancouver, but it’s a heck of a premium if you’re moving from elsewhere.
Montreal Real Estate Is Up To 43% Cheaper Than The Rest of Canada
Big premiums to own in the largest cities aren’t the norm, as Montreal demonstrates. Montreal single-family homes are 43.4% cheaper than the national index price. As for condos, buyers pay a 6.7% premium compared to the price of urban condos across Canada. Single-family homes are a deal apparently, condo apartments — not so much.
Canada’s priciest real estate markets now require massive premiums to live in. As the price of real estate meets the trend of more flexible working conditions, that can change fast. At some point, the pain of paying high shelter costs can become greater than the pain of moving. If that happens, it doesn’t matter how many amenities a city has. New buyers would struggle to use them, since they’re sinking their whole pay into a mortgage.
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Well, there is a city with higher median income than both Toronto and Vancouver but at half their prices.
For more appropriate context it would be helpful to compare this to the other World Class cities that real estate Bulls like to compare Toronto and Vancouver too. In isolation this makes sense, as they are the largest cities in the country – so the comparison is only way to really measure if they are over-valued versus national housing stock.
You think this is irrational, a single parking bay in Hong Hong fetched iUS $1.3 million ($10 million Hong Kong) just recentLy. A house in the same development went for US $177 million!
Do all of the lead pipes in Canada result in some sort of weird brain damage where everyone needs to compare it to one of the smallest land masses in the world?