Lack of development in ‘less affluent’ areas leading to price surge in unexpected neighbourhoods.
Stretching 19 kilometres across Toronto’s mid-section, commuters have been eagerly awaiting the official opening of the Eglinton Crosstown. The light rail transit system, also known as Line 5, will take passengers along Eglinton Avenue from the new Mount Dennis station at Weston Road all the way to Kennedy station in Scarborough. But despite its delayed opening of Fall 2022 — property values along some portions have skyrocketed in just the past five years by as much as 135%.
To put that into context, Toronto’s overall condo market in the past five years has appreciated just 72%..
Appreciation rates intensify at furthest ends of transit line
Strata.ca analyzed condo sales along the Eglinton Crosstown going back to 2011. That’s when the first phase of construction began. To get the most accurate picture, we calculated the average cost per-square-foot (PSF) for all condominiums within a 900-metre radius around all 25 stops.
Condos clustered around those stations furthest east and west have seen the highest appreciation rates. And trend lines show property values began their steep ascent about five years ago. The average cost PSF around Scarborough’s Kennedy station, furthest east on the line, was $212 in 2016. Currently in 2021, it’s sitting at $500; a stunning increase of 135%. Around Ionview station, one stop over, condo values have skyrocketed in the same time period by 134%.
On the westerly portion of Line 5, properties surrounding Mount Dennis station have seen an increase of 67% since 2016. But head one stop east to Keelesdale, and nearby condo prices have risen 103%.
Eglinton Crosstown will ‘breathe new life’ into overlooked pockets
Larry Medina is a realtor at Strata.ca. He’s been advising clients to consider neighbourhoods along the Eglinton Crosstown, partly because he took that advice himself. In January 2020, Medina and his partner purchased a home just south of Eglinton to take advantage of the new Line 5.
“We strategically bought near Caledonia station because we knew it would be a good long-term investment, and we were right. Prices have been increasing steadily there ever since,” he says.
Caledonia is where the new LRT system and the GO Barrie line will intersect. Although Medina bought a detached home, he notes condo values have also seen a significant jump.
“As we get closer to opening day, real estate prices are starting to pick up even more around here. I mean, in our neighbourhood...we went from $522 per square foot to nearly $640 in just 12 months,” says Medina.
Ask Cliff Liu, a broker at Strata.ca, who he believes will benefit the most. Liu says of course it’s those who own property along Line 5, but in less affluent neighbourhoods.
“If you own in an area that has yet to be gentrified, you’re definitely at an advantage. It may take several years, but the Eglinton Crosstown will breathe new life into these traditionally overlooked pockets,” explains Liu.
New condos clustered around flagship station; none further out
But despite all the opportunities a new transit line can bring, it appears developers have focused mainly on Line 5’s most central stations. Since 2011, a total of 44 condos have gone up within a 900-metre radius of all 25 stops. But of those, more than half were concentrated around just two stations:
- Yonge-Eglinton: 16 new condos
- Mount Pleasant: 13 new condos
In the past five years, property values near both of the above stations have risen 63%; quite modest compared to the appreciation rates seen elsewhere along the system.
Head further east or west along Line 5, and it’s a different story. For example, within a 900-metre radius of Kennedy, Ionview and Birchmount stations, no new developments have been built so far. On the opposite end are Mount Dennis, Keelesdale, and Caledonia stations, which have seen just three new condos go up in the past 10 years.
“Many homebuyers want to live near this new transit line, and being further from Yonge is no problem if you can now get to the core quite easily. But the housing supply hasn’t been able to keep up with this new demand, and the data certainly illustrates that,” explains Van Rhijn.
Despite the rising real estate prices that often come with better transit, Liu notes that homeowners in more prestigious areas aren’t as excited about the new Eglinton Crosstown.
“I’ve spoken to clients in Leaside, for example, and some of them aren’t thrilled about having an LRT run through their neighbourhood. It makes their community more accessible to the masses, and they worry this may actually bring their property values down,” says Liu.
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