Bay Street Bull’s real estate columnist, Shane Little, writes about the opportunity presented by a rare split in GTA home prices.

Written by Shane Little 

While GTA prices for single detached family homes fall, the condo market continues to be on fire, which presents a unique opportunity for condo owners looking to move up.

Those who pay attention to GTA real estate statistics developing in 2018 will have noticed  two separate markets competing within the overall housing market. New mortgage rules (the stress testing guidelines), higher interest rates, and recently enacted and government policy interventions (the foreign buyer tax) designed to cool the market have have reduced the ability for people to purchase family homes.

It has done nothing, of course, to curb the appeal of living in Toronto (see my Smart Money article here), and as a result all the money driven out of that freehold market (read: land) is pouring into the more accessible priced condo market.

The Toronto Real Estate Board’s Market Watch for March, 2018 says that prices for single detached family homes fell 17.1% in Toronto year-over-year to an average of $1.29M, which made them about $219K more affordable.

On the other hand, prices for condominium apartments in the city rose 7.1% over the same time, to an average of $590K. Even if you only bought last year, the market is effectively offering a $42k down payment on your next home. If you bought a few years ago, it’s to a really good opportunity to lock in a much bigger gain and keep moving up the realty ladder, whether it’s a semi, a townhouse or a single-family dwelling.

Real estate mobility is about exiting your investment at the right time.

Building wealth is about making a move at the right time. Staying informed with regard to what’s happening in the market and acting quickly can be the difference between cashing in or crashing at the tail-end of a wave.

For those who are looking to move out of condos into a larger home, I think the opportunity the current split market offers will only last for a short time, until a new equilibrium is reached. Those in a position to take advantage have to act fast before a large number of condo listings come up and purchasers drive up supply and prices go down.

Behind Spring, the fall is traditionally the busiest time in real estate, and lots of buyers are looking around. For those who have owned a condo for the last two-to-four years, and those who’ve been putting plans on hold, this fall may be the time to consider locking in on the upside of the rising condo market and moving the tax-free capital gains into a relatively cheaper starter family home.