Everything About Toronto Real Estate: Statistics & Outlook For 2023
Toronto real estate has seen very strong performance in the last 15 years, and we expect another strong period of growth for 2023 and beyond.
In this Toronto real estate statistics roundup and outlook, you’ll learn:
Population Demographics In Toronto
What Is The Population In The City Of Toronto?
According to the 2021 Canada Census, there are 2,794,356 people living in the City of Toronto and 1,160,890 housing units in the City of Toronto. That’s 7.6% of the population in Canada, or an average of 2.4 people per Toronto household.
Source: Canada Census, 2021.
What Percentage Of Toronto Are Renters?
47% of Toronto’s population are renters. This is up 1% from the 2016 census, and much higher than the Greater Toronto and Hamilton Area (GTHA), which only has 34% of renters.
Renters in Toronto still make up less of the population compared to other major cities in North America. So, we expect room for renter growth as Toronto become more of a of a global city.
Source: Canada Census, 2021; point2homes.com, 2022; NYC government, 2022; RentCafe.com, 2022.
What Type Of Homes Do People Live In Toronto?
The bulk of the housing supply growth has been concentrated in high rise apartments. So apartments make up 61% of total housing units in Toronto.
Single family homes make up 35% of total housing units in Toronto, but actual occupy a lot more residential land space.
Source: Canada Census, 2021.
Because of this, areas with more high rise apartments see the highest housing density and population growth. Houses in Toronto are seeing much lower density and, in many cases, declining population growth.
Source: Urban Toronto, 2016.
Toronto Rent And Price Growth History
How Much Have Rents Increased In Toronto?
Toronto rents have been growing at a strong 6.6% per year from 2004 to 2021.
Source: CMHC, 2022.
How Much Do Homes Appreciate Per Year In Toronto?
Toronto homes have been growing between 9.2% to 10% per year from 2004 to 2021:
- Toronto detached home prices have been growing at 10.0% per year
- Toronto semi-detached home prices have been growing at 9.8% per year
- Toronto condominium homes prices have been growing at 10.0% per year
This is at least 50% higher than the average rent growth in Toronto.
Toronto Real Estate Outlook For The Next 10 Years
What Will Be Toronto’s Population Be In the Next Few Years?
Canada plans on welcoming around 500,000 new immigrants per year from 2023 to 2025. This means Toronto may expect 38,000 new immigrants per year or 15,800 new households, assuming 7.6% of new immigrants move to Toronto.
Source: Canada.ca, 2022.
How Much Is Housing Supply In Toronto Going To Grow By?
Toronto plans on building 285,000 new housing units in the next 10 years.
City of Toronto’s focus will be on increasing density in low-rise neighbourhoods, by allowing single family homes to turn into multiplexes. This allows for a fast and cost-effective way to even out housing density in Toronto.
What Will Toronto’s Housing Market Look For 2023?
As long as interest rates stay high in 2023, it will be harder for people with low holding power to keep their homes.
The most vulnerable markets are likely starter freeholds in the GTHA suburbs, where buyers have barely saved enough for a down payment and are using all of their available credit. Prices for detached homes in the GTHA are still 39% higher than they were in January 2020. This is a lot higher than in the 416, so there is a lot of room for prices to go down in the GTA.
Condos are another market that may underperform in 2023. Before rate hikes, investors in condos had a negative cash flow, and when you add in much higher mortgage payments, their ability to hold on to the property gets much weaker.
We think that investment-grade homes will be the most stable type of real estate asset in 2023. Before interest rates went up, many freehold investors saw a few hundred dollars of positive cash flow, which helps pay for the higher mortgage payment.
What Will Toronto’s Housing Market Look Like In The Long Run (For The Next 10 Years)?
As Toronto’s population grows, we predict good price growth in all housing types.
Toronto real estate prices will become more of a math equation as the city’s renter population grows. More properties will be appraised based on rent yields, which will become a major price driver.
For example, if rents grow at 3%, this may translate to similar price growth at 3% to maintain rent yields consistent.
Easing policy changes in single family homes within Toronto may bring in higher appreciation in low-rise markets over the next 10 years.
If a single family home in Toronto can be converted into a triplex, this change can translate to a faster 22% price increase if rent yields stay the same.
Improving housing policies in Toronto in the low-rise market benefit rental properties in this sector.
As Toronto’s 2023 Housing Action Plan continues to move forward, investment grade homes will continue to get a lot of attention over the next 10 years.
Because of this, investment-grade houses in Toronto should outperform, with a better possibility of higher rental income and faster price growth in the long run.