As the average price of a home in Canada rises year-over-year, a new study is highlighting the growing gap between the cost of condominiums and houses in major Canadian cities.
Conducted by Point2 Homes and published earlier this month, the study shows that house prices are more than double the cost of condominiums in 14 Canadian cities, most of which are in Ontario and British Columbia. The data is based on MLS benchmark prices determined by the Canadian Real Estate Association (CREA) and realtor associations in each local market as of May 2023. Benchmark prices are assigned based on property types rather than square footage.
According to Point2 Homes, the study’s results paint “a bleak picture” for those looking to upsize from condos to houses, particularly in major real estate markets such as the Greater Toronto and Vancouver areas.
In Vancouver, for example, houses are approximately $1.2 million more expensive than condos, on average, representing a difference of about 153 per cent. The term “house”refers to single-family houses, attached single-family houses and townhouses or row houses, while “condominium” refers to apartments.
Meanwhile, in Trois Rivieres, Que., there is a price difference of $44,000 when comparing the average cost of a house to that of a condo. Aside from Trois Rivieres, the price gap between both property types is less than $100,000 in just three other cities – Halifax, St. John’s, N.L. and Sherbrooke, Que.
The national average price of a home stands at $709,218, according to the latest data from the CREA. While this figure represents a decrease month-over-month, it remains higher than the average price of a home in Canada exactly one year ago. Additionally, in an effort to dampen demand and cool inflation, the Bank of Canada recently increased its key interest rate to five per cent.
As average home prices and interest rates rise, housing affordability has become more of a concern for Canadians. Some have even decided to leave the country and settle abroad in an effort to secure more affordable housing and a lower cost of living.
“In a market defined by chronically increasing interest rates and steady demand, the idea that homeowners can comfortably one-up their residence is unlikely,” reads the study from Point2 Homes, published on July 5. “The concept seems particularly inconceivable when it comes to apartment owners looking to switch up to a house.”
The study also looks at the median household income of various Canadian cities to determine how many years of employment it may take to match the price difference between houses and condominiums. Income figures were sourced from Statistics Canada’s 2021 census.
In Calgary, for example, comparing the average cost of a house to that of a condominium leads to a price difference of $304,076, according to the study. Based on a median income of $89,972, it would take nearly 3.5 years to match this amount.
Meanwhile, in Halifax, there is a net difference of $84,400 between the average price of each property type. With a median income of $74,098, it would take slightly more than one year to match this amount. While the price difference between houses and condominiums varies by city, the overall gap has increased in recent years, according to the study.
Source: CTV News
