Certainly, we are all aware of short term performance in real estate. It’s all over the news, whether it be significant increases or significant decreases.
Let’s have a look at the last 5 years in the GTA.
Here are the average sale prices as reported by TRREB for single family homes of all types in the GTA, including houses, townhouses and apartments starting at the beginning of 2018 until now:
2018
$734,837 January 1st
$735,874 January 31st
$767,801 February
$784,514 March
$804,926 April
$803,440 May
$808,066 June
$781,918 July
$765,252 August
$796,814 September
$807,538 October
$787,741 November
$749,019 December
2019
$749,019 January 1st
$747,175 January 31st
$779,791 February
$788,133 March
$820,373 April
$838,248 May
$831,882 June
$806,971 July
$792,134 August
$842,421 September
$851,877 October
$843,307 November
$838,662 December
2020
$838,662 January 1st
$838,087 January 31st
$910,068 February
$902,788 March
$820,226 April
$863,563 May
$931,131 June
$943,594 July
$951,219 August
$960,613 September
$968,535 October
$955,889 November
$932,297 December
2021
$932,297 January 1st
$966,068 January 31st
$1,044,910 February
$1,097,319 March
$1,090,414 April
$1,108,124 May
$1,088,991 June
$1,061,724 July
$1,070,201 August
$1,135,027 September
$1,155,603 October
$1,162,488 November
$1,157,861 December
2022
$1,157,837 January 1st
$1,242,155 January 31st
$1,334,062 February (all time peak)
$1,298,671 March
$1,250,739 April
$1,210,700 May
$1,145,786 June
$1,073,318 July
$1,079,739 August
$1,086,505 September
$1,090,074 October
$1,079,122 November
$1,051,216 December
One year performance
We started at $1,157,837, and reached $1,051,216 by the end of the year, That’s a $106,621 decline or -9.21%.
Two year Performance
We started at $932,297, and reached $1,051,216 by the end of the year, That’s a $106,621 increase or 12.76%.
Three year Performance
We started at $838,662, and reached $1,051,216 by the end of the year, That’s a $212,554 increase or 25.34%.
Four year Performance
We started at $749,019, and reached $1,051,216 by the end of the year, That’s a $106,621 increase or 40.35%.
Five year Performance
We started at$734,837, and reached $1,051,216 by the end of the year, That’s a $316,379 increase or 43.05%.
What was the annual percentage increase?
1 year -9.21
2 year 6.38
3 year 8.45
4 year 10.09
5 year 8.61
Most accurate number
The most accurate number that we have for real estate performance, would be 8.61%. That’s the annual percentage increase, year after year for 5 full years.
If we wanted to provide a better number, we would only go back 4 years, since that provides the highest return.
If we wanted to discourage someone from buying and wanted to encourage someone to sell, we would focus on the one year return which is a minus 9.21%.
Be sure to see that actual numbers that someone is using in order to persuade you to adopt their point of view. Numbers don’t lie, but the choice of comparisons can yield different conclusions.
Brian Madigan LL.B., Broker