542 000. In downtown Toronto, the average Condo costs approximately $400 000, while the average single family home checks in at about $965 000.One effect of urbanization will be to exacerbate this contrast between urban and suburban home prices. A recent report by TD bank showed that new housing prices in the GTA are going down, while existing housing prices are on the rise. This validates the thesis that Toronto’s city limits have expanded too far, and the idea that new houses are being built in increasingly inconvenient and less desirable locations. Meanwhile, as home development has far outpaced investment in infrastructure, existing homes – especially those in proximity to transportation hubs – have seen their values increase due to decreasing supply and availability.
As the urbanization process continues, existing, single-family homes in desirable locations will likely become increasingly valuable. The ambiguity, however, lies in Toronto’s condo market. As supply increases, and Toronto’s skyline remains permanently littered with crane towers, many have doubted that there will be sufficient demand to occupy these units. However, as single-family home prices sky-rocket and the urbanization trends continue, the occupation of these projects may simply experience a demographic change. At a recent Bloomberg summit, Toronto’s top developers noted that they are seeing an increasing amount of families electing to raise families in condos. They attributed this to the urbanization process. For example, in other major metropolitan areas, such as London, New York, or Los Angeles, it is common for couples to raise families in apartment buildings. As a relatively younger city, Toronto has yet to fully embrace this idea, but as the shift in mind-set occurs and urbanization continues, condo developers are likely to see an increase in demand from the new family demographic.
Overall, urbanization will undoubtedly be one of the great disruptors of the 21st century, and both developing and developed nations alike will need to deal with their own respective difficulties. The world is changing, and these cities will need to adjust accordingly in order to efficiently handle these changes.
