Pricey real estate in Toronto is commonly considered some bizarre eastern phenomena particularly for someone living out west in Alberta. A lot more discussion is heard here regarding Vancouver house prices and the influence of foreign money (which we don’t see a huge influx of in Calgary although as a city we’d welcome more investment), and little thought is given to Ontario real estate craziness. It wasn't until I noticed a MLS listing on the greaterfool.ca website that it truly registered just how impossible it must be to live in a house in Toronto for a typical working person. Also, contrasting land value in Toronto to Calgary shows just how tremendous the value of property is in Calgary when considering where you can live (the best neighbourhoods) and what kind of house you can purchase (brand new amazing house) for a fraction of just the Toronto land cost. Our case study today is a property in the Leaside district, a nicely located Toronto suburb. This particular site doesn't mean much to me, having not been to Toronto for probably 25 years, so the only real landmark I would have is the baseball stadium. This property is about 10km, or a 20 minute drive from a bluejays game (likely off-peak given legendary Toronto traffic). I guess that means it is a pretty good location, but not on a lakefront mansion either. Median household income in Leaside is a laughable $130k, which, as you will see from the house pricing, would leave you homeless if you attempted to buy a house in Leaside.
This is a terrible value for what you get in a house. After including the tax you would pay $1.8 million to buy this house, and if you have $1.8 million, you dont want to live in this kind of house. So add in another million or so to build a new one. Now you are approaching $3 million for a detached house on a 28 ft lot in Toronto.
One of the most punitive taxes in Canadian history is the Toronto/Ontario land transfer tax payable by the buyer. I adds up here to $63k. If you had a house hold income of $130k, the norm in Leaside, you would be working most of a year just to pay your land transfer tax, you know, after you paid your other income/sales/consumption/energy taxes. Given Alberta does not hav such taxes, affordability is again vastly superior in the Calgary market. I dont think there is anywhere in Calgary where you’d pay $476/ft just for dirt as you would in Leaside. Typical Calgary land prices for a nice single lot would be about $100/ft in many desirable inner city areas, and no tax either (that’d put a 30 ft wide lot at under $400k all in).
Stay tuned for further postings on single detached house building in a really nice Calgary location. I may have some news to report…
So you would need about $8643 to cover the monthly cost of a Leaside property in a very old house that either needs torn down or a lot of renovations. A typical Leaside household would not be able to afford this payment, even with a $450k down payment to cover 20% of the purchase price and the land tax. This would be more than 100% of the take-home pay of this household. Good luck buying food in Toronto if you want a place to live!