6 Unbelievable Facts About Toronto’s Real Estate Market

If you’ve been following real estate news for the past few months, then you already know about the gravity-defying powers of the Toronto real estate market. Let us continue to wow you with 6 unbelievable facts about Toronto’s Real Estate Market below!

Skyrocketing Home Prices

Okay, this may not be new for you but do you know that the average price for a detached home in Toronto is now well above the $1.2 million mark? At an actual average price of $1.285 million, Toronto homes are now priced at 15.2% more than what they cost just a year ago.

As for the average home price (not just detached ones), it is now at $782,051 – a figure that is still likely to increase over the next few years because of high real estate demand, low supply, increasing interest from foreign buyers, and low bank interest rates.

Migration Boom

An estimate of about 2,800,000 new residents will call GTA their home in the next 25 years according to the Ontario Government. This means that by 2041, the region will be home to about 9.5 individuals, a 43% increase from the current population.

This Toronto migration boom is not just because of the influx of foreigners but is also because of the increasing number of Canadians who are now eyeing Toronto as their future home.

Real Estate Profitability

When it comes to gauging real estate profitability, cap rates are one of the major factors. It is the number that measures the return on investment if a landlord decides to rent out property. It is the annual return after all operating expenses such as maintenance and property taxes have been paid but before profit taxes are deducted. Isn’t it surprising that there isn’t much left over once the investor pays their profit taxes and mortgage interest?

20 Years to Pay

Numbeo says that a renter of an average property in Toronto’s downtown will take about 20.36 years to be able to pay the rented property’s market value. Considering that prices can get even higher outside the centre of the city, this is surprising indeed!

Numbeo is a website that measures prices of homes in various cities all over the world.

$25 Billion in Loans

Canada’s largest subprime mortgage lender, Home Capital Group Inc. has $25,222,523 worth of outstanding loans. About 90% of these loans are by people living around or in Toronto.

11 Homes per 1,000 Individuals

A recent report from the Royal Bank shared that for every 1,000 Toronto citizens, 11 housing units are being currently constructed. The report also shared that more than 4.5 per 1,000 people is considered high-risk zone.

At current time, the Toronto Real Estate Market is still hotter than ever, with prices still going up and showing no signs of slowing down in the near future.

Not sure whether you want to plunge into Toronto’s Marketplace? Stay tuned for more Toronto Real Estate news and updates! Better yet, contact us for any questions and don’t forget to register for Canada’s first ever International Property Investment Show!

Toronto Continues to Be One of the Growth Leaders in Canada This Year

What was merely predicted back in spring is coming to life for Toronto this summer. A few months ago, Canada’s Metropolitan Outlook’s Conference Board said that they are expecting that Toronto’s economy is going to expand by about 2.8% this year, making it Canada’s third fastest growing metropolitan economy. The same outlook shared that Hamilton will continue to outpace the national average as it did last year, maintaining a steady and solid economy.

The Conference Board of Canada’s Centre of Municipal Studies Associate Director Alan Arcand shared that Toronto’s overall economy growth in 2017 will be driven by healthy overall growth along with gains across the services-producing industries plus the continuing strong activity in non-residential construction and manufacturing. He added that the same can be said for Hamilton’s economy this year, although it is expected that Toronto will still surpass Hamilton. Hamilton’s growth is projected to be at 2.2% whilst Toronto’s is projected at 2.8%.

A Period of Growth for Toronto

Although the real GDP in Toronto is only expected to expand by 2.8% for 2017 (it grew 3.1% in 2016), the region continues to grow. Immigrants are still eyeing Toronto as a premium location, thereby fueling both domestic demand and population growth. This in turn drives activity in personal services, retail and wholesale trade, plus construction.

This year, construction in Toronto is expected to rise up 3.1%, mainly because of non-residential projects. Meanwhile, the services sector has a forecasted expansion of 2.8%. Positive outlooks are also forecasted for export-oriented industries such as tourism and manufacturing, largely because of a healthy U.S. economy and the lower Canadian dollar. As for the manufacturing industry in Toronto, the forecasted growth is also at 2.8%.

Job growth is expected to slow down this year despite of the healthy economic outlook. An estimated 31,000 new jobs for Toronto has been forecasted for 2017.

How About Neighbouring Hamilton?

Hamilton experienced a 2.1% growth in 2016 and that is not expected to grow much this year. The expected growth is at 2.2% despite both the non-residential construction and manufacturing sector boom expected this year. The manufacturing sector’s output is expected to rise up 2.4% for 2017 despite some companies deciding to move their operations to the U.S.A.

The non-residential construction projects such as the second phase of the James Street GO Station, the new multi-purpose building for McMaster University, and the Gerald Hatch Centre for Engineering Experiential Learning are expected to keep the construction sector working for most of the year. As for the services sector, the growth rate is still projected at 2.1% for the third year in a row.

Hamilton’s job creation is expected to slow down, from 3,600 in 2015 to about 2,800 new jobs in 2017.

5 Reasons Why Home Prices in Toronto Won’t Crash in 2017 and Beyond

We’ve passed the half year mark and it looks like the rise of home prices in Toronto is not going to slow down anytime soon. Ever wondered why? Here are 5 reasons home prices in Toronto won’t crash in 2016.


Take a Look at the Supply and Demand

Population in Toronto has been steadily growing, partly because of people moving into Toronto and the existing population growing by having children, building families, and the like. Demand for homes is at an all-time high with supply not currently able to meet the demand. This means sellers can increase their prices or homes are being sold to the highest bidders or whoever comes up with the best offer.

There is no truth that Toronto’s condo market is oversupplied either. First time buyers who cannot find homes or can’t afford homes just yet are happily swooping down to take on any newly available condo unit. With this trend, prices are bound to remain high or keep climbing.


The Economy is Stable

Home prices usually go down when there is a recession. When people lose jobs and can’t afford to keep their homes, a surplus of homes becomes a trend and prices go down. There is no recession in 2016 nor the near future in the GTA, although Ontario’s economic growth is a bit on the sluggish side in recent years.


Mortgage Rates Are Still Buyer-Friendly

No housing price crash is in sight for Toronto because although interest rates are increasing, it is only doing so in manageable increments that can be met by the income GTA residents are pulling in. A crash is only likely to happen if we are to see a spike in unemployment while interest rates soar to astronomical figures.


There is No Bubble to Burst

Some people are speculating that the GTA bubble will burst soon, but what isn’t there can’t burst. Housing experts do not define what is going on in Toronto as a bubble effect because that only happens when people are buying homes for purely speculative reasons or to make money. People are buying homes in Toronto because they need to be in Toronto; meaning, they make a living in Toronto. They’re not going anywhere soon.


There are Still Affordable Housing Options

Although buying a home may not be within everyone’s reach in Toronto, buyers who do not have the economic ability to purchase homes have no problem buying condos instead (they cost about half what a home costs on average). Even with that, it says that the average Toronto buyer is in good financial shape, given what the price range of a small condo in Toronto is, let alone a home.

With household wealth increasing more than household debt, people who have the means will want to have their own homes and those who have homes will either want to upgrade or keep their existing ones, bringing us back to reason number one, lots of demand with little new supply.