As a real estate broker, I am always asked about Toronto’s Real Estate market conditions and when is the right time to buy or sell. I have said for the past 15 years to all the bubble bursting enthusiasts is that the Toronto Real Estate market and the condo market is not going to burst but rather continue to rise with steady increases in prices. Some years will have smaller price increases due to the supply of condo units which is directly related to the completion of condo projects in and around the core. There are some key factors to this analogy that I see first hand - Demand, demand and more demand. The downtown core has grown significantly and most of the new construction projects are near completion and have completely sold out and to end users not investors. We are currently experiences record low levels of inventory. At the end of October 2016, there were only 1,295 Condos for sale on MLS in Central Toronto. This is down 42% from a year ago. Adding more pressure is the fact that there were only 1,112 condos listed for rent at that same time, which is down 30% from a year ago. The lack of supply and strong demand will continue to push prices upward at record levels.
Toronto has become a world class city and is the leader of Canada’s economical boom which draws both national and international attention. More and more people want to live in our beautiful city and are opting for the urban lifestyle that Toronto offers. Canada’s immigration levels remain high with strong demand of people choosing to live in Toronto. There are also talks of a spike in immigration from the U.S. after Trump’s Presidential win. On a global scale, our real estate prices per square foot are still very low comparing to cities like New York, London, Singapore, Hong Kong, Vancouver, Paris & Sydney. And although Canada is known for its sheer size, available land in such a large city like Toronto is becoming quite scarce.
Now with all this being said, I believe the sooner you get into the market the better. However sometimes there are certain time periods that are better or easier to buy in with fewer active buyers. With multiple offers once again becoming the norm in both the housing and condo markets, I often see fewer active buyers during the last month of summer around late August and the winter months especially the month of December closer to the holidays. If you are an investor or a buyer who is flexible with your occupancy date, it can be advantageous to look at investment units that are being sold having to assume the current tenant. This will reduce the amount of competition for the unit, giving you a better opportunity to negotiate in a seller’s market. As an investor, you also gain by having zero vacancy period and save money by not having to pay a finder’s fee to locate a tenant.
If you are thinking of selling, my advice is to do so only if you have certain circumstances requiring you to do so. It is definitely ok to sell a property if the numbers on the investment no longer make sense however reinvest back into real estate. It is definitely advantageous to sell if you are upgrading to a larger home or condo as we see percentage price increases. If the average price of a home increases by 10% and your home is worth $500,000 than your value increases by $50,000. If your home is worth one million dollars, than the value of your home increases by $100,000. This allows you to move up as the market continues to move up!
As a broker, I sell real estate but I am also an investor in real estate because I know that real estate is one of the best investments a person can have especially long term. I help my clients build successful real estate portfolio’s that profit from year over year price increases as well as the positive cash flows that an investment property can have. If you are a first-time buyer, my advice is to get into the market as soon as you can and climb the property ladder.