Is Toronto Heading for a Buyer’s Market? What Should Investors Consider Before Buying in This Market?
You can view the published article at Canadian Real Estate Magazine
Is Toronto headed for a buyer’s market? Why or why not?
I believe the Toronto condo market is shifting from a sellers market to a balanced market. I expect to see moderate growth over the next few years as we start to see interest rates increase. We need to stop focusing on the August and September numbers and need to see what happens in the first few weeks of October to really gauge what type of market we are in. As the smoke settles from the mortgage rule changes, I have personally already seen things pick up as investors and end users are coming off the sidelines and are buying condos again.
However, the low-rise market (single family dwellings) is another story and I expect we will remain in a seller’s market with bigger gains as supply dwindles. This is why there is now more demand for condos than ever before. This is due primarily because of Ontario’s Places to Grow policy, which strongly encourages intensification. This was implemented in 2006 to intensify downtown cores and that is exactly what we are visually starting to see now. The public can easily identify all of the condo buildings being developed because of the cranes and towers, but when low-rise developers stop building it isn’t as apparent. We are experiencing a shift in demand from low-rise to high-rise and we need to embrace change because Toronto is becoming a new city and the condo market is only going to get bigger!
What should investors bear in mind when considering an investment in Toronto in the next 6 months?
Hope for the best, but plan for the worse. If the real estate market takes a hit, can you get a tenant in the property to carry you through a bad market? If you can sleep at night knowing this is a possibility and you have the right team to find you the right property, then real estate is probably a good investment for you.
It is so important to do your homework and find the right team to work with you; Realtor, lawyer and accountant. And think long-term! A five-year plus timeframe is much safer and usually a much more lucrative investment. My clients and myself have made money in much less time, but it isn’t always that easy and we were prepared to stick around for the long-term.
Look for sub-markets that are about to experience a massive amount of development and growth. Talk with your team and maybe call a city planner to see what is planned for a specific neighbourhood. The Canary District is a great example of a sub-market that is about to experience huge growth. It is the site of the 2015 PanAm Games and is a big part of the Waterfront Revitalization Project. This will be a huge master planned community and if you get in at the very beginning (now) then you will be well positioned. As grocery stores, banks, restaurants and business start making their way into this neighbourhood more and more people will start migrating here, creating demand and therefore price growth. I have helped many of my clients successfully invest into this sub-market.
These are the fundamentals I have followed for years and they have helped me make a lot of money in real estate. The global economy is shaky right now and we could potentially feel the ripple of this, so it is best to buy now, but plan for the long-term.
Remember, history shows that more people have become millionaires by owning real estate over any other investment and it remains one of the safest and most profitable means of creating wealth, when done right!