Toronto Market Up 15.7% in a Year
For those who are following the market, here is a list of the average prices for single family homes in the GTA (Greater Toronto Area) in 2015 and for the first five months of 2016, as reported by the Toronto Real Estate Board.
Previously we had calculated the increase just this year, that is, 1 January 2016 to 31 May 2016. The increase in value so far this year has been $143,155.00, that’s a 23.5% increase, just in the first five months of 2016.
But, does that make sense? Is that a true indicator of the market?
Let’s do another calculation, this time from last May. This will give us the “trailing 12 months”.
If we undertake that calculation, we have a $102,269.00 increase from $649,648.00 to $751,908.00, which is a 15.7% increase for the trailing 12 months.
The only way that we can have a lower return is if we are losing money somewhere. In this case, the market trended downward late in the year. From May 2015 to November 2015 the numbers held fairly steady and then the market dropped.
Does this mean anything? Maybe not!
This is clear and predictable. It happens every year. So, if someone says that the market has gone up from last year, just exactly what do they mean? And, what’s more important, do they have a vested interest in telling you 23.5% rather than 15.7%?
Brian Madigan LL.B., Broker