What Toronto neighbourhoods had the best ROI in the last 20 years?

[christiesplits]

If you could go back in time to 1996, what area would you have purchased property? Curious to hear what the responses are. Areas that immediately come to mind are Willowdale and The Junction.

 

[cdr108]

In 1998 my wife and I bought our house in Cabbagetown for under $280K. The area was still pretty sketchy and my friends who'd bought in Milton or Pickering thought they'd get robbed when they visited. The neighbour's identical 5-bedroom three floor house just sold for $1 million. But it's not an investment unless you plan to sell, and I'm not going anywhere. Perhaps the kids will sell it when I croak.

Contrary to what builders and agents tell us, I do not think this phenenon is going to repeat today, where a $800K semi in Leaside that was $250K in 1996 is going to be worth $3 million in 2040, but we'll see.

Worst investment has to be a condo, as they're going up everywhere, maintenance fees will skyrocket as their window walls and mediocre build quality and materials reach their half lives in about 2030 and begin to fail.

i'm a little surprised by the low sale price of $1 million for that size of property (ie. 5-bedroom three floor house) in Cabbagetown.

i first got into the Toronto property market in 1998/99 and my analysis shows that valuations have gone up 4.5-5.0 x (ie. $100=>$450-500) in 17 years, which is insane and completely unsustainable (based on ultra-low interests, change in mortgage lending rules / lower CMHC requirements, increased foreign buyers, etc).

historical international data (over 100 years) shows RE prices only rise marginally above inflation and that prices double every ~17 years.
in the past 17 years, Toronto RE prices have gone up 4.5-5.0 x so housing appears to be more than 100% overvalued.
Toronto RE prices would need to fall by 50% to be fair value compared with rents and incomes.

 

[junior43]

My parents bought in 1971 and still own the house, it is worth approx. 60 times more than they bought it for. Not sure what that works out to but I'd guess it's higher than inflation. A lot higher. Granted these are also Toronto's greatest years for expansion, but it appears its been the norm for Toronto for quite some time - there was the 90's housing crash, but still.

 

[michaelnurse]

If you're still interested in this, we did some analysis that looked at the neighbourhoods that had the most appreciation over the past 15 years. You can find it here:
http://www.wishpad.ca/?page=featured&title=15-years-of-sold-data
http://www.wishpad.ca/?page=featured&title=15-years-of-sold-data

 

[Ex-Montreal Girl]

Riverdale. No question. $160K in 1985. Probably would have gone for $600-700K in 1996. Sold for $1.5 in 2012. Now I am thinking $2M.

(25 foot lot, triple private drive, two floor extension, ground floor family room, 3.5 baths)

 

[James]

If you're still interested in this, we did some analysis that looked at the neighbourhoods that had the most appreciation over the past 15 years. You can find it here:
http://www.wishpad.ca/?page=featured&title=15-years-of-sold-data

Nice info. Based on those compiled stats, the top 3 neighborhoods would be:

1. Greenwood-Coxwell
2. Woodbine-Lumsden
3. St. Andrew-Windfields

I can't say I'm surprised by any of these, to be honest. The first 2 have been largely due to significant gentrification over the last 15 years while St. Andrew-Windfields in the Bayview York Mills area has always been an affluent neighborhood where demand continues to be very strong, supply very limited and housing stock has changed noticeably from bungalows and side-splits on large lots to mansions and luxury homes on, well, large lots.

 

[christiesplits]

Great link, thanks michael.