People love to make this comparison, no matter if they know anything about New York City, or not.
Let’s take a look at a few condos for sale in Manhattan and compare them to what it would cost in Toronto…
“Toronto is still soooo undervalued compared to Paris, London, Hong Kong, and New York City!”
I’m so tired of hearing that.
It’s like the saying, “It could be worse.”
I hate that saying too.
Because it could always be worse. Anything could be worse! You broke your leg in a fall? Well, it could have been worse! You could have broke both legs! Think of the worst possible thing, anywhere, ever – and it too could be worse. There’s nothing worse than death? Sure there is – torture, then death!
The same mentality goes into comparing real estate values versus the top cities in the world.
The perennial market bulls love to compare Toronto’s prices to that of other world-class cities, and they say, “Condos are $550/sqft in downtown Toronto? That’s nothing! It’s less than HALF the going rate in New York!”
What does one thing have to do with the other? What does Vancouver have to do with Toronto either? I hear people talk about how condo prices are $850 – $1000/sqft in Vancouver, as if that somehow makes Toronto’s prices easier to swallow?
There is only ONE thing I like to compare Toronto’s real estate prices against, and you all know where I’m going with this – Toronto.
Compare Toronto’s prices today, against yesterday’s, two years ago, and two years from now. Compare downtown Toronto to uptown Toronto, and compare new Toronto condominiums to old Toronto condominiums.
Prices in Dubai are $3,000/sqft, and somehow this makes me feel better/worse/the same about Toronto prices?
I hate that argument.
But it got me thinking about New York City (or maybe I’m just nostalgic, since my fiancée and I went to New York City for the first time ever, exactly one year ago today), and so I thought I’d share a couple of active listings in Manhattan, which is what most people like to compare to downtown Toronto.
2nd Avenue & East 24th Street
571 square feet
This is a 1-bedroom condo, measuring 571 square feet, meaning the cost per square foot is just shy of $1,000.
It’s also an older building (keep in mind that while 70-80% of downtown Toronto condos are less than 10 years old, the same can’t be said for NYC), but this unit has been completely renovated.
The building is just north of Gramercy Park, although it’s one block from the hospital, two blocks from FDR Drive, and thus it’s pretty busy, and likely very noisy.
The condo fees for this unit are a whopping $816/month, which is more than double what you’d expect to pay for a 571 square foot unit in a downtown Toronto condo.
On the flip side, what does $560,000 get you in downtown Toronto?
Depending on the location, you could get upwards of 1,200 square feet, likely a 2-bed, 2-bath, and in a variety of different styles.
51 Walker Street
1,642 square feet
Welcome to Tribeca!
Having only been to NYC once before, I’m going to ask my readers: what area of Toronto would you compare Tribeca to? Queen West? Kensington?
With this unit, the price begins to creep up a little bit!
$1,522/sqft, although this is a new building (new in NYC means 2005), and it’s top of the line. Private elevator, 10 1/2 foot ceilings, and maybe everywhere!
$2,500,000 in Toronto would buy you one of the nicest condos you could find, or buy you the most expensive house in Leaside or Moore Park, a starter home in Rosedale, ortwohouses in Riverdale.
520 East 81st Street
465 square feet
Here we have a tiny unit – 465 square feet, in a building that was constructed in 1964, for a whopping $450,000.
East 81st Street.
I seem to recall that Jerry Seinfeld, in the show Seinfeld, lived on west 81st Street. I can’t remember his address, although the fact that I remember a TV character’s street is probably weird enough…
Just looking at the photo of the kitchen, you can tell that this unit needs a lot of work to bring it up to anything close to 2013’s standards.
It’s less than $1,000 per square foot, but not by much. And considering it needs a $30K renovation, you still wouldn’t net out at less than $1K per square.
A 465 square foot condo in downtown Toronto, in an average building, between 5-10 years old, would probably cost you $240 – $250K. I sold a unit earlier this year at the new M5V Condo for $299,900 that was only 410 square feet, but that was an insane price per square foot, and the demographic in that building is today’s uninformed youth that want to live “some place cool” no matter the price.
I found a few condos in NYC over $2,000/sqft, and a few closer to $800/sqft, but overall, the prices seem to be at least DOUBLE that of Toronto, on average.
So what lessons can we learn?
What conclusions can we draw?
“Toronto is so under-valued compared to New York City!”
I don’t think that’s the right turn of phrase.
Toronto costs less than New York City, but value is in the eye of the beholder. Millions and millions of people around the world would love to live in New York City, and thus the “value” of living there is much, much higher than Toronto.
Let’s just be thankful that the cost of living in Toronto is so much less than New York City, and leave the comparisons be.
Because you know that somewhere in Canada – St. John’s, Winnipeg, Thunder Bay, Medicine Hat – somewhere, there are people who are fed up with the real estate market in their city, and the market bulls are saying, “Yeah, prices have gone up, but still, Regina is sooooooo under-valued compared to Toronto!”