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Toronto Real Estate
Returns Report Q4 2018
About this report
It’s 20 years of Toronto real estate growth vs. select stock market indexes. I don’t
claim it’s a perfect comparison, or that a house is the ultimate investment vehicle
(they sure aren’t liquid) – it’s just to give a nice rough idea, out of curiosity.
To note:
• Real estate “returns” exclude land transfer taxes, sales commissions, etc. (which are significant)
• Stock market “returns” do not account for commissions, fees, taxes or re-investing of dividends
• For the S&P 500 for 2018 the return was -6.24%, but -4.42% with dividends re-invested 1
• When I say “Toronto” I mean strictly the 416 – not the whole GTA or CMA or TREB region
• Multi-year returns show the compound annual growth rate (CAGR) – the rate that if applied each
year would get you from the starting to ending numbers. Crudely, an “average” annual gain.
• The classic line applies: “past performance is not a guarantee of future results”
Sources:
• Real estate numbers from Toronto Real Estate Board (TREB) “Historic Housing Stats,” using average
prices from all Q4 transactions (Oct-Dec). The “All Real Estate” figure is essentially a portfolio of all
houses and condos from Etobicoke to Scarborough that were bought and sold through the TREB
MLS® System during the quarter. The stock indexes are a portfolio of major stocks.
• TSX/S&P ($CAD) and S&P 500 (converted to $CAD) from Yahoo Finance using Dec 31 closing
• MSCI World Index from MSCI website in $CAD dollars using Dec 31 closing figures
1-Source: http://www.moneychimp.com/features/market_cagr.htm
5.7% 8.9%
5.6% 4.7% 8.6%
1 YR. 2 YR. 3 YR. 4 YR.
8.1%
-11.6% -3.2% 3.3% -0.5%
S&P 500 -6.2% 5.8% 7.0% 5.0%
3rd
*
-0.5% 6.7%
1st 1st 2nd
World Index
Toronto RE vs. Markets
Recent Returns Q4 2018
After a wild year, Toronto real estate ends the year 3rd or 4th in these shorter timeframes, only
outperforming the TSX.
*
6.6% 3.8%
7.6% 8.2% 6.5%
5 YR. 10 YR. 15 YR. 20 YR.
6.7%
1.0% 4.8% 3.8% 4.0%
S&P 500 6.3% 10.7% 5.6% 3.6%
*
2nd
9.9% 10.8%
2nd
World Index
Toronto RE vs. Markets
Long Term Returns Q4 2018
Toronto RE outperformed all indexes in all views from 16 to 20 years. It topped the TSX in 18 of
20 views (all expect 1 and 2 years), is 10 of 20 with the S&P 500, and only 6 of 20 vs. the MSCI.
3rd 1st
* *
1 YR. 2 YR. 3 YR. 4 YR.
Toronto Real Estate
Recent Returns Q4 2018
The flatness of detached house prices in the past year and a half and continued rise of condo
apartments has allowed the condos to overtake detached in all views less than 7 years.
“All types” adds in attached freeholds (semis and rowhouses), condo townhouses, and “other”
5.6% 4.7% 8.6% 8.1% ALL
TYPES
0.1% -1.4% 7.0% 7.9%⌂
8.9% 13.4% 13.7% 11.2%
DETACHED
HOUSES
CONDO
APTS.
23%
55%
The above two segments accounted for 78% of Toronto transactions in 2018 (it was
82% in 2017 as detached shrunk from 27% to 23%).
Detached housing has outperformed condos for all views 7 years-plus. The “All types” growth is
affected by a changing mix as > 200K condos units have been added to the GTA housing supply in
the past 20 years: Condo apts (least expensive type) were 28% of transactions in 1997 but were
55% in 2017. Detached houses (most expensive) have fallen from 46% to 27% in that time.
5 YR. 10 YR. 15 YR. 20 YR.
Toronto Real Estate
Long Term Returns Q4 2018
7.6% 8.2% 6.5% 6.7% ALL
TYPES
8.1% 8.8% 7.4% 7.4%⌂
9.5% 8.3% 6.9% 7.0%
DETACHED
HOUSES
CONDO
APTS.
“All types” adds in attached freeholds (semis and rowhouses), condo townhouses, and “other”
$45K $184K $257K
1 YR.
increase
3 YR.
increase
5 YR.
increase
10 YR.
increase
$457K
1K 234K 413K 729K⌂
49K 191K 218K 330K
Current
avg. price
$838K
$1279K
$599K
Condo apt Q4 prices haven’t
decreased YoY since 2008
Toronto Real Estate
Dollar Increases Q4 2018
Detached still large on 3 year basis
despite being -$37K over 2 years
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
'99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
1-Year Returns (Q4 vs. prior Q4)
S&P/TSX ALL R/E
Detached Condo Apt
1-Year Returns: 20 Year History
Q4 2018
⌂14Profitable years in last 20 181819
8Years with highest return 660
7Years with lowest return 832
Most
volatile
Only negative year was global
financial crisis in fall of 2008
5-Year Average Returns
Q4 2018
⌂14Profitable 5-yr pds in last 18 181818
2Years with highest 5-year return 880
14Years with lowest 5-year return 400
RE never
negative in
a 5-year
view
Broke streak of 6 in a row for detached2006 and 2007
-5%
0%
5%
10%
15%
20%
'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
End Year
Rolling 5-Year Average Returns ending at Q4
S&P/TSX ALL R/E
Detached Condo Apt
10-Year Average Returns
Q4 2018
⌂13Profitable 10-yr pds in last 13 131313
2Years with highest 10-yr return 1100
10Years with lowest 10-yr return 102
Most volatile, and 6.7%
spread from best to worst
Range:
5.2%-8.2% Last 6 in a row
8.1%
7.5%
3.3% 3.4%
4.2%
4.5%
6.5%
5.2%
4.7%
1.4%
1.7% 1.6%
4.8%
6.0%
6.8%
5.2%
6.0%
6.2% 6.3%
5.5%
6.0%
5.9%
6.2%
7.4%
6.3%
8.2%
0%
2%
4%
6%
8%
10%
'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
End Year
Rolling 10-Year Returns ending at Q4
S&P/TSX ALL R/E
Detached Condo Apt
4.1%4.0%
3.8%
4.8%
1.0%
-11.6%
5.7%
3.6%
5.6%
10.7%
6.3%
-6.2%
6.5%
6.7%
8.2%7.6%
5.6%
7.3%
7.4%7.4%
8.8%
8.1%
0.1%
7.0%
9.5%
8.9%
-15%
-10%
-5%
0%
5%
10%
15%
22212019181716151413121110987654321
Return period, in years, counting back from Q4 2018
Compound Annual Growth Rate, 1-22 years
S&P/TSX S&P 500 ALL R/E
Detached Condo Apt
Average Annual Return Timeline
Viewed from Q4 2018
The composite Toronto real estate number
(“All R/E”) has better returns than the TSX
in all time horizons
Despite being negative in the 2 year
view, Detached house prices have a
7% to 9% CAGR over 3 to 22 years
@areacode416 century21.ca/scott.ingram
Click for more fresh statistics and insight on Toronto real estate:
Your home is the single largest investment you'll make — trust it with an accountant.
Would you like to make better-informed real estate decisions? I believe knowledge is
power. So, I invest a lot of time researching and analyzing data and trends in the
Toronto real estate market. My Chartered Accountant (CPA, CA) side also compels
me to dig way deeper than most agents into the numbers on individual properties my
clients are interested in. If you would like to benefit from the same type of analysis and
insight that is sought by media outlets and institutional investors, reach out. Better
information = better decisions.

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Toronto Real Estate Return On Investment 1999-2018: Q4 2018

  • 1.
  • 2. Toronto Real Estate Returns Report Q4 2018 About this report It’s 20 years of Toronto real estate growth vs. select stock market indexes. I don’t claim it’s a perfect comparison, or that a house is the ultimate investment vehicle (they sure aren’t liquid) – it’s just to give a nice rough idea, out of curiosity. To note: • Real estate “returns” exclude land transfer taxes, sales commissions, etc. (which are significant) • Stock market “returns” do not account for commissions, fees, taxes or re-investing of dividends • For the S&P 500 for 2018 the return was -6.24%, but -4.42% with dividends re-invested 1 • When I say “Toronto” I mean strictly the 416 – not the whole GTA or CMA or TREB region • Multi-year returns show the compound annual growth rate (CAGR) – the rate that if applied each year would get you from the starting to ending numbers. Crudely, an “average” annual gain. • The classic line applies: “past performance is not a guarantee of future results” Sources: • Real estate numbers from Toronto Real Estate Board (TREB) “Historic Housing Stats,” using average prices from all Q4 transactions (Oct-Dec). The “All Real Estate” figure is essentially a portfolio of all houses and condos from Etobicoke to Scarborough that were bought and sold through the TREB MLS® System during the quarter. The stock indexes are a portfolio of major stocks. • TSX/S&P ($CAD) and S&P 500 (converted to $CAD) from Yahoo Finance using Dec 31 closing • MSCI World Index from MSCI website in $CAD dollars using Dec 31 closing figures 1-Source: http://www.moneychimp.com/features/market_cagr.htm
  • 3. 5.7% 8.9% 5.6% 4.7% 8.6% 1 YR. 2 YR. 3 YR. 4 YR. 8.1% -11.6% -3.2% 3.3% -0.5% S&P 500 -6.2% 5.8% 7.0% 5.0% 3rd * -0.5% 6.7% 1st 1st 2nd World Index Toronto RE vs. Markets Recent Returns Q4 2018 After a wild year, Toronto real estate ends the year 3rd or 4th in these shorter timeframes, only outperforming the TSX. *
  • 4. 6.6% 3.8% 7.6% 8.2% 6.5% 5 YR. 10 YR. 15 YR. 20 YR. 6.7% 1.0% 4.8% 3.8% 4.0% S&P 500 6.3% 10.7% 5.6% 3.6% * 2nd 9.9% 10.8% 2nd World Index Toronto RE vs. Markets Long Term Returns Q4 2018 Toronto RE outperformed all indexes in all views from 16 to 20 years. It topped the TSX in 18 of 20 views (all expect 1 and 2 years), is 10 of 20 with the S&P 500, and only 6 of 20 vs. the MSCI. 3rd 1st * *
  • 5. 1 YR. 2 YR. 3 YR. 4 YR. Toronto Real Estate Recent Returns Q4 2018 The flatness of detached house prices in the past year and a half and continued rise of condo apartments has allowed the condos to overtake detached in all views less than 7 years. “All types” adds in attached freeholds (semis and rowhouses), condo townhouses, and “other” 5.6% 4.7% 8.6% 8.1% ALL TYPES 0.1% -1.4% 7.0% 7.9%⌂ 8.9% 13.4% 13.7% 11.2% DETACHED HOUSES CONDO APTS. 23% 55% The above two segments accounted for 78% of Toronto transactions in 2018 (it was 82% in 2017 as detached shrunk from 27% to 23%).
  • 6. Detached housing has outperformed condos for all views 7 years-plus. The “All types” growth is affected by a changing mix as > 200K condos units have been added to the GTA housing supply in the past 20 years: Condo apts (least expensive type) were 28% of transactions in 1997 but were 55% in 2017. Detached houses (most expensive) have fallen from 46% to 27% in that time. 5 YR. 10 YR. 15 YR. 20 YR. Toronto Real Estate Long Term Returns Q4 2018 7.6% 8.2% 6.5% 6.7% ALL TYPES 8.1% 8.8% 7.4% 7.4%⌂ 9.5% 8.3% 6.9% 7.0% DETACHED HOUSES CONDO APTS. “All types” adds in attached freeholds (semis and rowhouses), condo townhouses, and “other”
  • 7. $45K $184K $257K 1 YR. increase 3 YR. increase 5 YR. increase 10 YR. increase $457K 1K 234K 413K 729K⌂ 49K 191K 218K 330K Current avg. price $838K $1279K $599K Condo apt Q4 prices haven’t decreased YoY since 2008 Toronto Real Estate Dollar Increases Q4 2018 Detached still large on 3 year basis despite being -$37K over 2 years
  • 8. -40% -30% -20% -10% 0% 10% 20% 30% 40% '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 1-Year Returns (Q4 vs. prior Q4) S&P/TSX ALL R/E Detached Condo Apt 1-Year Returns: 20 Year History Q4 2018 ⌂14Profitable years in last 20 181819 8Years with highest return 660 7Years with lowest return 832 Most volatile Only negative year was global financial crisis in fall of 2008
  • 9. 5-Year Average Returns Q4 2018 ⌂14Profitable 5-yr pds in last 18 181818 2Years with highest 5-year return 880 14Years with lowest 5-year return 400 RE never negative in a 5-year view Broke streak of 6 in a row for detached2006 and 2007 -5% 0% 5% 10% 15% 20% '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 End Year Rolling 5-Year Average Returns ending at Q4 S&P/TSX ALL R/E Detached Condo Apt
  • 10. 10-Year Average Returns Q4 2018 ⌂13Profitable 10-yr pds in last 13 131313 2Years with highest 10-yr return 1100 10Years with lowest 10-yr return 102 Most volatile, and 6.7% spread from best to worst Range: 5.2%-8.2% Last 6 in a row 8.1% 7.5% 3.3% 3.4% 4.2% 4.5% 6.5% 5.2% 4.7% 1.4% 1.7% 1.6% 4.8% 6.0% 6.8% 5.2% 6.0% 6.2% 6.3% 5.5% 6.0% 5.9% 6.2% 7.4% 6.3% 8.2% 0% 2% 4% 6% 8% 10% '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 End Year Rolling 10-Year Returns ending at Q4 S&P/TSX ALL R/E Detached Condo Apt
  • 11. 4.1%4.0% 3.8% 4.8% 1.0% -11.6% 5.7% 3.6% 5.6% 10.7% 6.3% -6.2% 6.5% 6.7% 8.2%7.6% 5.6% 7.3% 7.4%7.4% 8.8% 8.1% 0.1% 7.0% 9.5% 8.9% -15% -10% -5% 0% 5% 10% 15% 22212019181716151413121110987654321 Return period, in years, counting back from Q4 2018 Compound Annual Growth Rate, 1-22 years S&P/TSX S&P 500 ALL R/E Detached Condo Apt Average Annual Return Timeline Viewed from Q4 2018 The composite Toronto real estate number (“All R/E”) has better returns than the TSX in all time horizons Despite being negative in the 2 year view, Detached house prices have a 7% to 9% CAGR over 3 to 22 years
  • 12. @areacode416 century21.ca/scott.ingram Click for more fresh statistics and insight on Toronto real estate: Your home is the single largest investment you'll make — trust it with an accountant. Would you like to make better-informed real estate decisions? I believe knowledge is power. So, I invest a lot of time researching and analyzing data and trends in the Toronto real estate market. My Chartered Accountant (CPA, CA) side also compels me to dig way deeper than most agents into the numbers on individual properties my clients are interested in. If you would like to benefit from the same type of analysis and insight that is sought by media outlets and institutional investors, reach out. Better information = better decisions.