Let’s have a look at the last 5, 10, 15 and 20 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:
As of 31 December
2002
$275,371
2007
$394,931
2012
$478,739
2018
$734,837
2022
$1,051,216
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%, which works out to 6.38% annually.
Ten year Performance
We started at $478,739, and reached $1,051,216 by the end of the year, That’s a $572,477 increase or 119.58%, which works out to 11.96% annually.
Fifteen year Performance
We started at $394,931, and reached $1,051,216 by the end of the year, That’s a $856,285 increase or 166.18%, which works out to 7.75% annually.
Twenty 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 281.75%, which works out to 14.09% annually.
What was the annual percentage increase?
5 year 6.38%
10 year 11.96%
15 year 7.75%
20 year 14.09%
Most relevant number
The most relevant number that we have for real estate performance, would be 8.61%. That’s the annual percentage increase, year after year for the last 5 full years. So, if you bought and held on for 5 years, you made money.
However, if someone were to hold on for 10 years, then, they have almost doubled their return.
At 15 years, we are slightly better than our baseline at 6.38%
Move that to 20 years and their return is 14.09% annually or 2.21 times the 5 year return.
Obviously, it makes sense to hold real estate for the longer term.
Brian Madigan LL.B., Broker