Risk Assessment: a neighbourhood-by-neighbourhood guide to the safest places to buy real estate in Toronto

No neighbourhood will react the same way to a burst bubble. We talked to market watchers, economists, mortgage brokers and seen-it-all real estate agents for the scoop on where to park your money, what streets to avoid and when to sell, sell, sell

The Bridle Path is the place people go to flash their money, and prices here are based as much on bragging rights as market value. Though the high end of the market is more stable, average home prices took a tumble between 2008 and 2009, from more than $4 million to less than $2 million. In 2007, a two-storey villa at 12A Park Circle was listed at $6.25 million, and when it was on the market again in 2009, it dropped to $4.9. Properties below the $2‑million mark, for which there is more demand, are usually safe.
Risk Assessment: Medium

There are two sides to Forest Hill. The lots on the classic inner streets—Dunvegan, Old Forest Hill Road—are about as safe as it gets in Toronto. Forest Hill is also (relatively) tear-down tolerant, unlike Rosedale. But there are the less prestigious and riskier streets like Heath, just north of St. Clair, where people buy to say they’re in Forest Hill. These streets, bordered by apartments and rentals, don’t have the same cachet. The house at 35 Heath, originally listed in January 2008 at $2,325,000, dropped six months later to $2,079,000.
Risk Assessment: Very low

Some experts say the quintessential Toronto establishment neighbourhood has suffered financially from its historical designation. Fewer options for renovation and practically none for tear-downs (Heather and Gerry notwithstanding) make it a like-it-or-lump-it community. Those who like it like it a lot, and you don’t see much price spiralling on Cluny or Binscarth or Beaumont during bubbles. Crashes? Sure, a lot of brokers and traders live here, but Rosedale’s residents aren’t often worried by interest rates.
Risk Assessment: Very low

The Annex is a gem, if not a flawless one. Values here will remain more stable than most in the city, but the closer you get to Dupont, the more house prices are subject to correction once the market cools down. One unrenovated Dupont house right beside the tracks was listed for $549,000 and sold for $715,000 this past April after getting multiple offers. When this bubble deflates, those buyers are going to start hearing that train and feeling the walls shake, and future buyers will be reluctant to meet the same inflated price.
Risk Assessment: Low

Yorkville is big with the money people, who like the narrow Victorian houses and the plush new condos for their proximity to financial industry watering holes like L’Unità. According to one agent who specializes in the area, York­ville became a dead zone in 2008 while easily spooked buyers waited and watched. Then it spun on its heels; this year, prices rocketed (one house that was listed at $2.6 million in 2006 was relisted at $3.9 million this spring) and buyers lined up.
Risk Assessment: Very low

This is the very definition of a stable neighbourhood. Buyers put down roots and stay put. Such streets as Prince Edward and King Georges, Wendover and Kings Lynn will not lose their value except in the most extreme circumstances, like a worldwide financial meltdown. There are a few exceptions, including houses beside the railroad along Westrose Avenue. 106 Westrose was listed at $829,000 in October 2008, before the downturn had registered in some sellers’ minds. It was back on the market a year later, and the price had fallen to $679,000.
Risk Assessment: Very low

Roncesvalles is one of those hot neighbourhoods surrounded by less gentrified strips, and, as such, not every street is prime. The centre of the ’hood is strong, among the fastest and most steadily appreciating neighbourhoods in the city according to the CMHC. Garden, Galley, Fern and the middle section of Sorauren are highly sought after by young families. The riskier streets are to the north and south, bordering stagnant commercial stretches of Dundas West and Parkdale.
Risk Assessment: Low

Small-scale development in this neighbourhood is catering to 30‑something buyers who want a piece of the West Queen West action but think the cheaper properties west of Dufferin are a little too remote. The neighbourhood includes such perpetually upward-trending spots as the Ossing­ton strip and the streets surrounding the park, like idyllic Gore Vale, Claremont and Crawford. The construction around CAMH guarantees a good investment on such nearby streets as Fenning, Brookfield and Givins.
Risk Assessment: Low

According to the CMHC, one of the few organizations that reliably crunches real estate data on a neighbourhood level, Danforth Village, with an average house price of about $425,000, is one of the areas that offers the highest potential for price growth in the mid-term. It is also a prime candidate for precipitous depreciation, since cautious buyers would be less likely to take a chance on the next-big-thing area during uncertain times. The farther east along the Danforth, the less likely it is that houses will retain their value in a downturn.
Risk Assessment: Medium-high

The Beach is one of those neighbourhoods dominated by middle-aged, double-income people who, in the minds of some mortgage brokers, are striving a little too hard for what they think they deserve and, as a result, commit too large a proportion of their income to a mortgage. These are the people who are most likely to be tipped over the edge by even modest increases in interest rates, which could result in block after block of “For Sale” signs in the not too distant future. The safest spots, value wise, will be the closest to the lake.
Risk Assessment: Medium

This neighbourhood of artsy 30-somethings was up-and-coming a decade ago and has now mostly arrived. The stock is still dominated by modest two-storey semis, and the renos have been minimal, kept mostly to interiors. The weak spots here are along the railroad to the east, busy thoroughfares Gerrard, Queen and Eastern, and the seedy bits between Coxwell and Woodbine.
Risk Assessment: Medium-high

Average house prices here were about $740,000 this year, or half what they are in Benning­ton Heights, immediately south of Leaside. With most of the same amenities and proximities, this would make Leaside a good bet for value retention, were it not for that pesky demographic of over-reachers looking for the poor man’s Moore Park and Lawrence Park. Many residents are young families with stretched resources, making them especially vulnerable to rising interest rates.
Risk Assessment: Medium

Despite all the hype, the cool cafés and the gourmet chocolate shops, house prices in this not-quite-arrived part of town sit at the
relatively low average of $455,000. The main commercial strip on Dundas West is still gap-toothed, with vacancies and junk shops in the spaces between the new doggie daycares and raw food bars. As High Park and Bloor West Village continue their climbs, the Junction will continue to benefit from the runoff, but the fact that it’s not Bloor West Village tends to loom larger when the market wobbles.
Risk Assessment: Medium-high

Once the very definition of Toronto grit, Parkdale has followed a familiar gentle upward arc out of the bargain basement. But, like the Junction, the grit hasn’t been totally eradicated, and the plethora of dollar stores, payday loan companies and soup kitchens is still a huge disincentive. A detached Victorian at 1586 King West demonstrates the fragility of the newly high Parkdale prices: listed at $589,900 in the heady days of early 2007, it was back on the market at a humbled $539,000 exactly two years later, an 8.6 per cent drop in 24 months.
Risk Assessment: Medium-high

Bloor West Village is another well-established neighbourhood, close to High Park and ritzy Baby Point, out of the downtown fray but near enough by car and transit. Eighty per cent of houses, mostly detached homes built between 1946 and 1970, sell for between $500,000 and $750,000—higher near Bloor’s commercial strip. Prices are less stable to the north, where Dundas is a light-industrial mayhem of auto body shops and KFCs, and to the west, close to Jane Street’s modest bungalows and low-end commercial strip.
Risk Assessment: Low

The average unit price in condo town is about $350,000. There are plenty of jittery first-time buyers moving in, possibly not entirely aware of the ramifications of changing interest rates. It’s also prime investor territory. According to the CMHC, between 30 and 40 per cent of Toronto’s condos are owned by people who either rent them out or flip for a profit. In CityPlace, that figure is likely even higher. Investors are a fickle lot, and even a slight downturn or increase in interest rates could prompt a wave of sales, which by definition would dampen prices.
Risk Assessment: High

Though the neighbourhood is undoubtedly gaining in value in the long term, with the enormous amount of condo development, a Whole Foods moving in, and easy access to the TTC and the commuter highways, Yonge and Sheppard stands to lose a lot from a bubble deflation. It isn’t yet established as a neighbourhood per se, which means people could very well be buying just because interest rates are low, rather than being especially attracted to the place itself. And simple laws of supply and demand suggest prices will take a tumble.
Risk Assessment: Medium-high

This is one of the city’s can’t-go-wrong neighbourhoods, its upward rise seemingly unstoppable. Given its proximity to the core and to Withrow Park, plus the healthy commercial strip on Danforth, there’s little chance prices will suffer from a burst bubble. Even the demographic is more stable than, say, the Beach, which has the same working-age cohort but more children and, as a result, far more stretched lines of credit.
Risk Assessment: Very low

Yonge and Eglinton has the advantage of being a destination neighbourhood. There is a Yonge and Eg type: young but not too young, family just started. Tucked between Forest Hill and Lawrence Park, the area is aspirational without being out of reach, which may be the root of its one problem: the neighbourhood’s $500,000 to $800,000 houses are within reach of double-earning new parents but an interest-rate percentage point away from being too much to handle.
Risk Assessment: Medium

Though it’s increasingly known for high-end condos, this is also one of the most popular neighbourhoods for first-time buyers looking for homes below the GTA average price. They tend to find these in the mid-range buildings (like 3 Rean Drive), which go for less per square foot than their downtown counterparts. Bayview Village’s weak spot is its single family dwellings, especially its 1960s bungalows. They often sell as tear-downs for $500,000 and are easy targets for a price correction.
Risk Assessment: Medium-high

(Images: Ryan Szulc; Roncesvalles, Bloor West Village, The Beach, Leslieville and Harbourfront by Devin Jeffrey)