The Missing Middle: are Townhouses the answer?

By Penelope Graham, Zoocasa

Special to the Financial Independence Hub

Shelling out a million for a home is no longer just an issue for downtown dwellers: it now costs that much on average to purchase a detached house in the ‘burbs, according to several new reports.

The February numbers from the Toronto Real Estate Board reveal regional home prices have surpassed two pricey milestones; average detached home prices in the city proper have hit the $1,500,000 mark, and $1,106,201 in the surrounding GTA. That’s tough news for those planning to trade a lengthy commute for affordable housing, as the competitive factors from the hot Toronto real estate market now stretch as far as the Niagara Region.

Too few houses to go around

The latest narrative around GTA housing is the scant supply of listings, with just 793 detached houses changing hands last month. “The listing supply crunch we are experiencing in the GTA has undoubtedly led to the double-digit home price increases we are now experiencing on a sustained basis, both in the low-rise and high-rise market segments,” said Jason Mercer, TREB’s director of market analysis. “Until we see a marked increase in the number of homes available for sale, expect very strong annual rates of price growth to continue.”

And it’s not just the resale market that’s too hot to handle. January numbers from the Building Industry and Land Development Association (BILD) report newly-built low-rise housing –- whether it be detached, semi-detached, or freehold row houses –- also exceed the average million mark, as fresh stock is immediately snatched up.

“The GTA is facing a severe shortage of housing supply, particularly for single-family homes, which sell as soon as they come to market. When there aren’t enough homes to satisfy demand, prices increase and that is exactly what has been happening in our region over the last decade,” stated BILD President and CEO Brian Tuckey. He adds there are a number of reasons behind the dearth of homes including “Lack of serviceable land, excessive red tape, and frequent delays in the development approval process,” as well as an increased builder focus on higher-density housing as per the province’s mandate.

Townhouses: The answer for Move-Up buyers?

The reality for many prospective homebuyers is that income growth is not keeping pace with home price appreciation. According to 2011 census numbers, the average Toronto household makes a median income of $76,219. In terms of mortgage affordability, assuming the borrower has great credit, qualifies for a 2% variable rate, has a 20% down payment and an amortization timeline of 30 years, that would still only qualify them to borrow $636,886. That’s literally hundreds of thousands of dollars short of TREB’s average home price in the City of Toronto and the GTA.

 The 20 most affordable Toronto neighbourhoods for townhouses

While Toronto condos are still a relatively affordable entry point at an average of $515,424, not everyone is willing or able to deal with reduced square footage and the high-rise lifestyle. For this group, townhouses may be the answer, reveals data compiled by Zoocasa. According to 2016 sold home numbers, the average townhome unit (including new and resale) is still available for $562,187: well within the realm of affordability for Toronto’s median buyer. Check out the map above to see the pockets of affordability within the city’s real estate market, with the 20 most affordable neighbourhoods to purchase a Toronto townhouse.

Penelope Graham is the Managing Editor of, a leading real estate resource that uses full brokerage service and online tools to empower Canadians to buy or sell their home faster, easier, and more successfully.



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