Calgary vs Toronto (GTA): Head to Head
Canada’s quickly growing cities are grabbing more attention in the past few years than ever. Cities such as Calgary and Toronto are making headlines worldwide. While recently attention has been understandably focused on Toronto's ongoing mayor scandal, business networks continue referring to Canadian cities when recommending investment opportunities.
While all of this is good news for Canadians, the statistics pertaining to Canadian real estate are often skewed to promote the market in Toronto and the GTA over other cities. Given the fickle nature of statistics, understanding data sets is often difficult enough. Combined with the task of filtering out bias much of the mainstream statistics becomes unreliable.
In order to compare the two markets raw data would likely be the best place to start. So once we have all the raw data, where do you start?
Total and Type of sales made
Simply put the easiest set of numbers to jump to when looking to compare two cities is sales. The data is sorted by the type of homes sold, and having the numbers side by side allows for quick comparisons. But this does pose several important questions. The data does not reflect the population of the cities or the location(s) of the properties sold.
When comparing the two cities it is important to remember that the city of Toronto has a population of 2.7 million and that does not include the GTA, while metro Calgary is just under 1.1 million. With the shear number of people in Toronto, data related to sales do not illustrate the true nature of the market. So where do you turn?
Calgary vs Toronto Sales
Calgary vs Toronto Sales per Million Residents
Sales per million residents is nearly 2.5 times higher in Calgary than in the City of Toronto and 2.25 times higher than in the GTA. The only property type where Toronto outsells Calgary is apartment condos (apartment sales per million about 14% lower than Toronto).
Months of Inventory
One of the statistics often used to compare real estate markets is Months of Inventory on the market. This statistic refers to the rate at which homes are selling and shows whether the market favours buyers or sellers.
The Months of inventory is calculated by dividing the number of properties listed on the MLS® Systems by the number sold in that month. For instance, if Toronto had 2000 houses on the market and sold 1000 in January, the Months of Inventory (MOI) would be 2. The higher the MOI number, the more it favours the buyer as a higher number indicates a saturated market.
As the data below shows, The TOTAL MOI in Calgary was less than 2 months, while both Toronto & GTA have listing inventories of over 3 months. Even more significant is the level of Apartment Condo inventory in Toronto & GTA. Both now exceed 4 months, an indication of lower demand for apartment condos, which favours buyers when negotiating price. Semi-detached homes in the city of Toronto & GTA have an MOI of just over 1 month, which indicates strong demand and heavily favours the seller.
Bear in mind that listing inventory does not take into account properties in the pre-construction or construction phase which generally aren't listed for sale on the MLS® systems.
Calgary vs Toronto Listing Inventory (MOI)
Comparing complex statistics
Using data from the Toronto & Calgary Real Estate Boards (TREB and CREB) we can begin to understand what the numbers actually mean. If we look at Calgary for January 2014 we can clearly see that the Detached Homes as well as the Townhouses have a lower MOI compared to Toronto. This means that sellers are able to set higher prices as well as expect multiple offers on their property because of simple supply and demand. As there are less of these properties on the market, the demand and with it the price goes up.
Using the same technique, we can determine that the MOI is much lower in Calgary in every category save for Semi-detached homes. The shear volume of Toronto inventory places the MOI much higher in most cases than Calgary.
Toronto & the GTA have always had higher home prices than Calgary. Toronto is an expensive place to call home. Breaking out the numbers the only type of property that sells for more in Calgary than Toronto or the GTA is townhouses.
The median price of a Calgary apartment is 15% less than in Toronto, while the price of a middle-of-the-road home in Calgary is 34% less than Toronto (19% less than GTA)
Calgary vs Toronto Median Sale Price (January 2014)
Things to take away
While Toronto may have the eye of the nation's media on it, it's important to remember this is due to the population and size of the city. Calgary may be smaller, but the number of families that are drawn to the city contribute to the higher demand, lower MOI’s and in turn, a better market for selling real estate.
- Total real estate sales are 3% lower in Calgary than the City of Toronto (-61% vs GTA)
- Total sales per capita are 146% higher in Calgary than Toronto (124% higher than GTA)
- Calgary has far more of a seller's market than either Toronto or GTA due to significantly lower listing inventory
- The median price of a Calgary home is 34% less than Toronto (19% less than GTA)
It is also worth noting there are literally thousands of apartment condos in the pre-sale or construction phase in both Calgary and Toronto, as well as thousands more that have been proposed. This certainly will have an impact on listing inventory and sale price in the next few years.
Calgary and GTA Communities
All sales & listing data for Metro Calgary are defined as properties within the Calgary city limits. It excludes approximately 30% of the Calgary Board's MLS® sales & listings from areas surrounding Calgary such as Bearspaw, Heritage Pointe, rural properties in MD of Foothills & Rockyview, outlying towns such as Airdrie, Cochrane, Okotoks, High River and any out-of-province listings.
The City of Toronto sales & listing data are defined as all properties within the central City of Toronto.
The Greater Toronto Area (GTA) sales & listing data, as defined by TREB, includes all properties within the City of Toronto plus six surrounding areas:
- Halton (includes Burlington, Halton Hills, Oakville)
- Peel (Brampton, Caledon, Mississauga)
- York (Aurora, East Gwillimbury, Georgina, King, Markham, Newmarket, Richmond Hill, Vaughan, Whitechurch-Stoffville)
- Durham (Ajax, Brock, Clarington, Oshawa, Pickering, Scugog, Uxbridge, Whitby)
- Dufferin (Orangeville)
- Simcoe (Adjala-Tosorontio, Bradord West Gwillimbury, Essa, Innisfil, New Tecumseth)
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