This HuffPost Canada page is maintained as part of an online archive.

Toronto Homeowners Get $8,500 Richer Every Month, While Condo Owners Get The Shaft

Toronto Homeowners Getting $8,500 Richer Every Month

Forget working. The real way to accumulate wealth is to buy a single-family house in Toronto, and wait.

OK, that’s bad advice. But given what’s been going in Toronto’s housing market, you can be forgiven for coming to a conclusion like that.

If you own an average single-family home in Toronto, your net worth has been growing by about $8,500 a month over the past year.

According to the latest numbers from the Toronto Real Estate Board, a single-family home in the 416 now averages $1,053,871, up 10.7 per cent from a year ago. Break down that increase by month, and you get around $8,500.

But in yet another sign of the growing gap between condos and houses, Toronto’s condo dwellers aren’t seeing anywhere near that kind of wealth growth.

The average Toronto condo is now worth $418,603, 5.6 per cent more than a year ago. That works out to a wealth gain of $1,925 a month. Condo owners are growing their wealth at less than one-quarter the pace of homeowners. In the 905 region around Toronto, condo owners are adding only $637 per month in wealth.

Condos just aren’t seeing the same rate of appreciation. While standalone homes in Toronto have grown by 34.8 per cent in price over the past three years, condo prices have gone up only 10.9 per cent in that time.

Say hello to the new face of wealth inequality in Toronto, where owning a back yard is a pass to riches, and owning a balcony is a pass to condo fees.

But so what, you may ask. This value is tied up in the home, it’s not like people can live off it.

Well, yes and no. A growing number of Canadians are taking out home equity lines of credit against the value of their house. The higher the house value, the more they can borrow, and some experts are getting worried Canadians have borrowed too much this way.

And there is also the wealth effect: People change their behaviour when they feel richer, generally buying more than they otherwise would.

This effect seems to be strong in Canada right now. It certainly helps to explain why consumer spending held up in Canada this year despite all the talk of recession, and why imports to Canada are strong even while exports are flailing.

So the money may be stuck in your home, but its effects on the economy are real.

Here’s a breakdown of how much wealth Toronto-area residents are accumulating per month off their real estate.

Single-family homes in Toronto (416):

$8,491 in wealth per month (avg. price $1,053,871, up 10.7 per cent in a year)

Single-family homes in GTA (905):

$6,404 in wealth per month (avg. price $732,852, up 11.6 per cent)

Condos in Toronto (416):

$1,925 in wealth per month (avg. price $418,603, up 5.6 per cent)

Condos in the GTA (905):

$637 in wealth per month (avg. price $307,295, up 2.2 per cent)

Also on HuffPost

One Bloor

Coolest Condos Going Up In Toronto (2015)

Close
This HuffPost Canada page is maintained as part of an online archive. If you have questions or concerns, please check our FAQ or contact support@huffpost.com.