Toronto's housing boom has been generous to homeowners, but some may get a shock later this month when they open their property assessment notices to find the value of their home has jumped nearly 50 per cent.
Across Ontario, property values increased 18 per cent between 2012 and this year, or 4.5 per cent a year on average, according to the latest assessment data released by Municipal Property Assessment Corp., which conducts assessments on more than five million residential properties in the province once every four years. The values reflect what homes would have sold for on Jan. 1 of this year.
Property values have increased province-wide at an even pace since 2008. But over the past four years, some communities have boomed on the heels of Toronto's overheated real estate market.
Home values in Richmond Hill have surged 47 per cent since 2012, or nearly 12 per cent a year on average. In Markham, assessed values jumped 44 per cent. Both communities outpaced the growth in assessed values in Toronto, where homes have appreciated 30 per cent on average over the past four years.
Much of the growth has been fuelled by the soaring costs of detached homes in what were traditionally the more affordable areas of the region, such as the suburbs and outer reaches of the city. A shortage of listings for detached homes has helped fuel a 19-per-cent increase in resale prices in the Greater Toronto Area over the past year.
"It has a lot to do with supply and demand and what we have seen is that where … the relative value of the property is lower than it would be for a property that's closer to the downtown, people move to those areas," said Rose McLean, MPAC's chief operating officer. "So there's more demand for houses in those areas … and you see that increase in the demand really driving the prices higher."
Condos have not appreciated at nearly the same rate. Across Toronto, property values for single-family homes jumped 36 per cent since 2012 to average $770,000, compared with 12 per cent for condos, which now have an average value of $363,000.
Suburban Scarborough had the strongest increase in home values within the city. Single-family home values surged 44 per cent to $625,000 since 2012 and condos jumped 20 per cent to $270,000. In central Toronto, where the average single-family home was worth $1.17-million in January, assessed values rose 36 per cent, while condos increased 12 per cent to $423,000.
Outside of the GTA however, homes have appreciated far less in many other housing markets.
Property values have increased just 13 per cent in Windsor and 8 per cent in London since 2012, driven by weaknesses in the manufacturing sector. In Ottawa, home values rose 8 per cent over the period, or 2 per cent a year, held back by concerns over the budget cuts of the previous Conservative federal government.
"Especially in Ottawa, there was uncertainty about federal governments and job security in some of the public sector areas," Ms. McLean said.
The GTA is not the only region of the province to have seen home values surge. In parts of northwestern Ontario, including Thunder Bay and Kirkland Lake, property values have jumped more than 20 per cent over the past four years.
Ms. McLean attributed the housing boom in those areas to the relative affordability of homes, where even small price increases can appear to be huge percentage gains, along with the growth in resource sector employment in some communities since 2012.
MPAC spreads out property assessment changes evenly over the four years, but the sheer strength of the market in some regions could mean some homeowners will be in line for substantial property tax hikes this year. The full picture won't be known until municipalities begin setting their budgets. In many cases, homeowners whose property values have risen more than the average in a local area will see property taxes increase more than those whose homes have not appreciated as quickly.