Having Trouble Finding a Place to Buy or Rent in Toronto? You Are Not Alone
Toronto is Canada’s most sizzling city in terms of condo and population growth. It has a vibrant culture, amazing architecture, a diverse historical background and an educated population. This is why the housing market from the past few years has been largely immune to the price fluctuations experienced in other parts of the country.
In most cases, both residential and commercial properties have maintained or gained new territory in the last couple of years. Making easy to buy if you qualify for a large mortgage, and even tougher to rent at an affordable price
Toronto real estate is considered a pillar of strength in the Canadian market place during the past ten years. With housing and property costs rising year after year.
The value of Toronto properties for the coming years is given by organizations like the CMHC (Canada Mortgage and Housing Corporation) by using key factors like mortgage rates, income and employment, net migration and demographics.
Mortgage rates are having an impact on Toronto’s real estate market because higher rates could reduce the housing demand. In other words, the lower the mortgage rates, the higher the price of a house gets, therefore, lower mortgage rates could add too much pressure for first-time homebuyers in Toronto.
During the last few years, mortgage rates have been significantly lower in Toronto, so experts predict there is going to be a continual rise in the cost of Toronto properties. Easy money and a lack of available properties contribute to the dilemma for renters and first time home buyers alike.
Two main factors contribute to investor faith in the Toronto market: the level of employment and population’s average income. Citizens of Toronto, and Canadians, in general, have full-time jobs, and also, the workers’ income will continue to rise, due to the country’s general need for the work force. This in return, will boost the demand for the property because of the increased employment rate and higher income, which leaves people more money to spend.
However, while the numbers are still encouraging, things don’t stand as they used to during the past few years. Also, net migration is also having an impact on Toronto’s housing market due to the same reason: the overall purchasing power of the population. More tourists and visitors could mean more potential investors and buyers, which could reduce the impact of the low mortgage rates.
Statistics have shown that migration will still play a major role and although the exact numbers are unknown, foreigners, mainly Iranians, and Koreans have already purchased a significant number of luxury properties in Toronto. In fact, foreign investors are one of the leading buyers of luxury real estate in Toronto.
Across the country in Vancouver, the local government introduced a 15% transfer tax on foreign purchasers of property. The same has not yet happened in Toronto, and has not even been discussed by Toronto City Council
The Canadian demographics is also a decisive factor in the future of the market. The population of Canada is aging, so the birth rate is decreasing. Given the decline in the natural population, the demand for Toronto real estate may slightly drop at some point, but the influx of foreign investors can reduce the impact of the aging population.
There are lots of fluctuations in the price of property in Toronto, mainly gains. This will have an impact on your decision to rent or buy, but if you are buying at these prices your plan should be to purchase your property as a long-term investment. A property strategy should be thought out and carefully planned and budgeted.
It’s not going to that easy so follow. You need to foresee the loss and profit, possible market downturns, pros and cons of renting or buying given your cash flow.
Toronto is still and will always be one of the most competitive locations in the Canadian real estate market. And investors know time is of the essence, now it’s the best time to close your property transactions. Who knows how high this is going to get?