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5 Downtown 'Hoods with the Highest Price Growth in 2017

5 Downtown 'Hoods with the Highest Price Growth in 2017

Looking to buy a condo in downtown Toronto? Read this first.

Last year we saw a huge surge in price increases across the Toronto real estate market. The rapid growth was an anomaly compared to previous years, as a wave of demand shifted from the Vancouver market into Toronto, but let’s not overlook the insights last year can offer. Whenever you see a surge in activity, you’ll get a look at market demand factors.

The yearly increase in value was different from neighbourhood to neighbourhood across Toronto in 2017. We collected data on the neighbourhoods with the highest annual price growth in the condo market. While it’s unlikely that 2018 will see the same level of price growth, looking at the 2017 data could lead us in the right direction concerning which neighbourhoods are worth watching this year.

These are the top 5 downtown neighbourhoods with the highest price growth in 2017*

#1 – Yonge and Bloor

2017 Growth – 28.08%

Avg PSF: $938

Starting it off we have Yonge and Bloor. A classic neighbourhood, this should come as no surprise really. Next door to Yorkville, home to designer fashion, celebrity hangouts, and centered on Toronto’s main subway hub, the Yonge and Bloor neighbourhood will likely always hold a top spot in the neighbourhoods with highest property growth.

This year was a little different, however, due to the launch of The One by Mizrahi. This project opened in the marketplace with starting prices of $1,500 PSF. The One set a new standard on local value for the neighbourhood, allowing (or forcing, depending on how you look at it) other residential properties in the area to adjust values to this higher standard. The impact of this adjusted neighbourhood value was negative for many of the smaller businesses along Yonge Street , but when it came to residential properties the impact was something to celebrate.

#2 – Fort York

2017 Growth – 27.82%

Avg PSF: $750

For York. Fort what? You know, that collection of condo towers along Lake Shore Boulevard somewhere between CityPlace and Liberty Village. Yes, that place.

We’re a little surprised to see Fort York taking the second-place prize, but when we think about it a bit longer it starts to make sense. We put out a post recently about the condo buildings in Toronto that had the most overall unit sales in 2017, and what we found was that newer buildings with modern amenities and convenient connection to urban transit were most popular across the board. Fort York is exactly that.

As a neighbourhood, Fort York is lacking in some of the more attractive amenities of a modern metropolitan city like Toronto, but it’s just a small neighbourhood within that larger city. What we mean by that is that Fort York is well-connected, and likely those routes of connectivity will continue to grow and improve.

Centered at Bathurst Street and Lake Shore Boulevard, Fort York has a transit accessibility advantage, which easily translates into an A+ for location. Several TTC streetcar routes intersect at this location, plus the Billy Bishop Toronto City Airport is within walking distance following Bathurst Street south.

The buildings and units are new or relatively young, which means they offer modern conveniences and amenities that the Toronto condo dweller wants. Open concept designs and floor to ceiling windows, you’re going to get some beautiful lake views here for sure. While Fort York may lack certain city amenities (it doesn’t really feel like you’re living ‘downtown’ downtown), it’s coming along nicely and offers affordability and connectivity.

#3 – Cabbagetown

2017 Growth – 27.72%

Avg PSF: $665

Cabbagetown is one of Toronto’s most beloved neighbourhoods. Quaint, historical, culturally rich and community-conscious, this neighbourhood offers an innate value that is hard to tag with a price. In real estate, however, price is the king and Cabbagetown has seen an explosion in the average condo price-per-square-foot, rising 37.45% since 2016.

One possible factor contributing to the aggressive price growth in Cabbagetown is its proximity to Regent Park, a neighbourhood that has been recently revitalized with new Toronto condos . The Daniel’s Corporation has committed to creating a community-first residential development plan, drawing a lot of attention for its 60,000 sqft cultural centre, aquatic centre, and community park at its core. The redevelopment of Regent Park has brought a new appeal to these east end neighbourhoods. Cabbagetown, however, is still offering better value for your dollar with an average PSF of $712 compared to $824 for Regent Park.

Another factor is the limited supply of condos in Cabbagetown, which would have kept competition high and prices growing. There are 17 buildings in the neighbourhood, according to our database, and only three active listings at the time of writing this. That’s not a lot, compared to King West for instance that has 95 buildings. Cabbagetown is a coveted area in Toronto and the value of that reputation will always be reflected in the price of homes.

#4 – CityPlace

2017 Growth – 27.51%

Avg PSF: $763

Unsurprisingly, CityPlace makes an appearance on this list. CityPlace featured prominently on our list of the Top-Selling Toronto Condo Buildings in 2017 , and likely for the same reasons why we see it here as one of the Toronto neighbourhoods with highest price growth in 2017.

In a quick comparison to Cabbagetown, CityPlace has a similarly small number of condo buildings, only 19 on our database. Most of these buildings, however, are high-density towers, and there are currently 49 active condo listings at the time of writing this. While CityPlace is a small neighbourhood, it has a large supply of condos for sale and for rent.

Rental appeal is likely the key contributor to the price growth seen in CityPlace. The average rental PSF is $3.46, compared to Fort York at $3.44, and the City of Toronto average PSF of $3.24. Clearly, the value of a rental property in CityPlace is an attractive factor for buyers and investors who are seeking a cash-flow positive investment in a city that just recently capped yearly rental increases and imposed stricter landlord and tenant rules. There is a high proportion of 1-bedroom condos in CityPlace , and it’s general knowledge that CiyPlace condos are largely renter occupied. It’s an attractive locale for the young, working professional in Toronto. The huge price growth in 2017 suggests that buyer and investor demand flocked to CityPlace, seeking to capitalize on the rental investment potential.

#5 – The Waterfront

2017 Growth – 25.82%

Avg PSF: $810

You’ve probably heard someone say this before, “I have a great view of the lake, of the downtown, but a new condo is going up right in front of me. Goodbye lovely view.”

Condos in the Waterfront neighbourhood are perpetually under threat of losing their beautiful views of the lake, but they are also some of the safest condo views in the city, simply because developers can’t build anything new in front of them. In this way, Cabbagetown, the Waterfront offers its own unique neighbourhood value to homeowners, and it’s an ideal destination to buy a condo in Toronto.

Compared to Fort York and CityPlace, the Waterfront actually has the highest average rental PSF at $3.57, and yet we don’t think that rental investment played as strong a role in the 2017 price growth, at least not in drawing investor demand. That’s because the Waterfront has a higher proportion of 1+1 and 2-bedroom condos, and even 3 and 3+1-bedroom condos. Larger units such as these tend to appeal to buyers who want to live in the units themselves or hold them as a pied- à -terre . As an example, at the time of writing this there are roughly 4.8 condos for rent per building in CityPlace compared to 1.8 condos for rent per building in the Waterfront.

Similar to Yonge and Bloor, the Waterfront will likely always appear among the top neighbourhoods for highest price growth. The exclusive lakeside amenities make it incomparable across the city, challenged only by the Beaches in the east and Etobicoke’s growing waterfront community in Mimico. But still the Waterfront offers a unique living experience. With the redesign of Queens Quay West, residents enjoy improved bike baths and streetcar service, combined with several urban parks, the Harbourfront Centre, and access to the Martin Goodman Trail. Not to mention the aquatic activities of the lake itself. It’s a place people want to live.

Signs of highest growth in Toronto neighbourhoods

As we move along into the 2018 spring real estate season, it's likely that the trends in these five neighbourhoods will continue to have an impact on rising price growth. All in all, there appears to be a correlation between the highest condo real estate price growth and neighbourhoods that offer these three things:

1. Convenient access to Toronto's public transit routes.

2. New or young buildings that offer modern amenities for young working professionals.

3. A sense of exclusivity in the character of the neighbourhood.

Do these qualities matter to you? Let us know!

*Data sourced via Condos.ca as of March 15, 2018.