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Sizzlers and fizzlers

July 12, 2008
Catherine Farley


TORONTO STAR

Toronto real estate has been on a roller coaster ride over the past 40 years, with soaring highs, gut-wrenching lows, strange twists and heart-stopping turns.

As an investment, you could always count on upscale areas like Rosedale, Forest Hill and the Bridle Path to produce good long-term returns. But if you put your money in the Beach or Riverdale in the last 20 years – or in more recent hot spots like South Riverdale and East York – growth has been spectacular. And, while new development has boosted prices in outlying regions such as Milton, King and north Pickering, other areas in north Toronto and parts of Markham are flatlining.

Surprisingly, 40 areas across the GTA have not even kept pace with inflation since house prices hit their 1989 peak.

The three maps show how average house prices have evolved over the last 40, 20 and 10 years. The largest map – showing changes since 1999 – includes the outer regions, reflecting the increasing coverage of the Toronto Real Estate Board, which tracks resale housing sales.

To view the map: http://multimedia.thestar.com/acrobat/50/79/d004eda0453f8443bb506994c2ad.pdf

Ever wondered how houses have stood up as an investment? We decided to take a look. Graphics reporter Catherine Farley – working with Star data analysts Damian Listar, Hidy Ng and business researcher Peter Smith – crunched 40 years of numbers and unearthed a few surprises:

1,250%
Average resale house prices have increased a whopping 1,250 per cent since 1969 – about the same performance as the stock market, where the TSX composite index rose 1,244 per cent.

2.5x
Both house prices and the TSX outstripped inflation – which stands at 484 per cent over the last 40 years – by 2.5 times.

Drop
Since the last price peak of $280,676 in 1989, the average price across Toronto fell 31 per cent, to a low of $192,406 in February 1996.

Lag
Since that peak, some areas have enjoyed gains of more than 100 per cent, but in 40 of 85 areas tracked by the Toronto Real Estate Board, prices have not kept pace with inflation.

Buy
Smart buyers head out in January when prices are usually lower, and have been consistently the lowest for the year in the last decade. Often, they're rewarded with prices lower than the previous December.

Sell
May is the highest month for house prices, followed by December. One notable exception was 1989; prices peaked in October.

Hot
Top 40-year gains: Bridle Path, Forest Hill, Annex/Yorkville
Top 20-year gains: Clarkson (Mississauga), the Beach, Riverdale
Top 10-year gains: South Riverdale, East York, the Beach

Posted on Monday, July 28, 2008 at 06:27PM by Registered CommenterElaine in | CommentsPost a Comment | References1 Reference

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