Will there ever be a comeback? Toronto’s detached home saw a 20 percent fall in price since the pandemic peak
Toronto detached home prices have fallen more than any other type of housing in the city since the February 2022 peak — but real estate observers say there’s a resurgence coming for the not-so-humble dream home.
“While interest rates have created a more difficult market in Toronto, we are actively seeing a comeback,” said Cailey Heaps, CEO of Heaps Estrin Real Estate Team.
Detached homes in Toronto saw demand and prices fall significantly in February this year from the same month two years ago, a report from the Toronto Regional Real Estate Board reveals.
The decline, which comes after a period of rising interest rates, could be a sign that more buyers are pursuing less expensive homes, analysts say. But, according to industry insiders the Star spoke to, there’s reason to believe we’re about to see a resurgence for Toronto’s detached homes — a return to favour for the city’s typically most coveted home type that is already underway in the suburbs.
Toronto’s detached home market saw a strong rise between February 2020 and February 2022, with a 9.8 per cent increase in sales and a nearly 40 per cent hike in the average price to just over $2 million. But between February 2022 and 2024, both fell significantly: sales decreased by 27.7 per cent, while the average price dropped 20 per cent.
And despite a rise in sales last month of 17.9 per cent over the same month a year ago, the price for detached homes in Toronto fell 3.5 per cent, to an average of $1,657,026.
Jason Mercer, TRREB chief market analyst, told the Star previously that affordability concerns could be a driving factor behind this. Families that would have looked to buy a detached home in Toronto may instead be finding more price-friendly semi-detached homes or townhomes, or viewing options in less expensive areas of the GTA.
Andre Sorensen, a professor of urban geography at the University of Toronto, says semi-detached homes and townhomes can give homeowners more usable space for their money spent, without the higher maintenance costs often required for a detached home.
He also understands the sticker shock on detached homes causing buyers to look elsewhere, as someone currently looking to buy a new home himself.
“I last bought a house 20 years ago and I’ve been shocked at the prices,” said Sorensen. “This seems like a market that’s really heating up again … it makes it all that much less affordable, especially for people trying to get into the market.”
But for those who can afford it, there’s many reasons buyers might dream of a detached home, compared to a semi-detached home or townhome, such as the lack of a shared wall through which to hear noisy neighbours (or their children). It’s the type of home that most families dream of for themselves, said Cali Bajer, a real estate representative with Hammond International Properties Ltd.
Heaps expects the months ahead will see a return to rising demand and prices for detached homes in Toronto, particularly in the wake of anticipated easing of interest rates and the return of more buyers to the market. She says this is already underway in the suburbs, which saw a 21.7 per cent rise in demand and a 1.7 per cent increase in prices compared to February 2023.
This article was first reported by The Star
