What $1M will buy: 10 years ago in the housing market vs. today

A decade ago in Canada's hottest real estate markets, it would've been possible to buy a home in good shape, in a desirable neighbourhood, for $1 million. But a new report says that simply isn't the case any longer.

Royal LePage compared two-storey detached homes between 2007 and 2017 to see how much $1 million could buy then and now. The answer — across almost all markets in the country — is much less space.

Buying power in Vancouver and Toronto has been hit the hardest.

"A million dollars 10 years ago had a connotation of some luxury to it," said Dianne Usher, who represents central Toronto realtors for Royal LePage.

"Today in those major centres, it's a little more than a startup, tear down, lot value in the central parts of both of those cities."

Usher blames a combination of a falling supply of houses and rising demand.

That demand is being driven up in part by buyers concerned that they will be priced out of the market, according to RBC economist Eric Lascelles.

Impact of low interest rates

"There's this fear of missing out — if I don't buy now, it's going to be even worse a year from now. So people will shut their eyes and swallow and jump in the market," Lascelles said.

Lascelles says ultra low interest rates are keeping mortgage payments relatively affordable, as home prices climb ever higher.

"However, arguably over the last few years in particular, we're now in a position where home prices have now even exceeded that kind of logic," Lascelles said.

In markets like Toronto, where the average cost of a detached home jumped 35 per cent over the past year, Lascelles says house prices are bound to cool down eventually.

"At some point, there are no more buyers that can make those payments," Lascelles said.

Usher, though, is confident that low interest rates, combined with an influx of people moving into cities — from suburbs and from other countries — will continue and that will keeping driving prices higher.

"Ten years from now I don't think we'll be able to get a million dollar home in major centres," Usher said. "I think what's a million dollars today will be two million in 10 years."

Toronto: $1,099,000

This approximately 1,500-square-foot Toronto home, located in the Dovercourt-Wallace Emerson-Junction neighbourhood, is listed for $1,099,000. 

Ten years ago, $1 million bought an average of 2,664 square feet; today it buys 1,722 square feet.

Vancouver: $999,000

This 2,196-square-foot Vancouver home, located in the Mount Pleasant neighbourhood, is listed for $999,000. 

Ten years ago, $1 million bought an average of 1,846 square feet; today it buys 1,229 square feet. 

Winnipeg: $1,075,000

This 3,248-square-foot Winnipeg home, located in the River Heights neighbourhood, is listed for $1,075,000.

Winnipeggers experienced a major space-squeeze over the past decade, but $1 million still buys the most space in any major Canadian city.

Ten years ago, $1 million bought an average of 4,400 square feet; today it buys 3,505 square feet.

Montreal: $1,095,000

This 3,551-square-foot Montreal home, located in the Notre-Dame-de-Grâce neighbourhood, is listed for $1,095,000.

Ten years ago, $1 million bought an average of 2,984 square feet; today it buys 2,585 square feet.

Saskatoon: $999,900 

This 2,073-square-foot Saskatoon home, located in the University Heights neighbourhood, is listed for $999,900.

Ten years ago, $1 million bought an average of 3,117 square feet; today it buys 2,829 square feet.

Calgary: $991,900

This 2,548-square-foot Calgary home, located in the Aspen Woods neighbourhood, is listed for $991,900.

Ten years ago, $1 million bought an average of 2,513 square feet; today it buys 2,477 square feet.

Halifax: $989,900

This 4,009-square-foot Halifax home, located in the Peninsula West End, is listed for $989,900.

Halifax is the only city where $1 million today can buy more than in the past.

Ten years ago, $1 million bought an average of 3,154 square feet; today it buys 3,316 square feet.