In our last posting, we had a rant about our house in Vancouver area. The property market seems to have fully recovered there, the average home price has even reached all-time high.
Today, we checked the property market in Greater Toronto Area from Toronto Real Estate Board. The chart looks pretty much the same. The average home price also has reached all-time high recently. What is more interesting is the fact the the price has jumped about 20% in the last 12 months.
Is the trend still healthy or is it in bubble yet? Let’s check chart below and apply Rule 72. The current price is about $450,000, and we have the half of that price, i.e. $225,000, in year 1998. It means it takes about 12 years to double the price. Using Rule 72, we can conclude that the annual price increase is about 6% (72 / 12). It looks that the trend is still healthy.
Note that the calculation above is just approximation. First of all, we just used the chart below without knowing the actual numbers. Secondly, Rule 72 itself is also an approximation. 
