Hi Folks,
I hope you are doing well.
With real estate prices rising to record levels in the Toronto area, some people are beginning to speculate that condos will soon be priced so high, they will soon be out of the reach of the average buyer.
Could this actually happen?
Seriously, could condo prices rise high enough, that the majority of people will not be able to buy one?
In my personal view… it could happen.
Daniel Tencer of the Huffington Post writes,
“Single-detached home prices in the city of Toronto jumped by 32.3 per cent in a year, and now average $1.35 million. In the surrounding 905 region, detached homes jumped 25.5 per cent and are now on the verge of hitting the $1-million mark, at $957,517.”
For those of you that are not familiar with the Toronto area, the “905 Region” consists of cities surrounding the City of Toronto.
In his article, Daniel mentions that as real estate prices continue to rise, single detached homes remain far out of the reach of most of Toronto’s first time buyers.
Further, Daniel states that:
“Prices for condos in Toronto jumped 13.5 per cent (since 2015) to $471,256.”
Not only did condo prices jump in Toronto, they also went up in price in the “905 Region”. According to Daniel:
“…the average condo there (in the 905 Region) jumped 18.9 per cent in price in the past year, to $374,792.”
So what does this all mean?
It could mean that Toronto’s home ownership rate is going to start to drop, as some experts have predicted already.
Just take a look at this.
This is the “Average Annual Toronto Sale Price” dating back to 1970.
If prices continue to rise in this manner, as you can see in the chart above, this will result in more people becoming renters for life, unless a major correction in price occurs.
This is where the opportunity lies.
If there is one piece of advice I can give you, it is this…
BUY A CONDO IN TORONTO NOW !
Condos are still affordable and they are a great investment for new real estate investors, looking to buy their first rental property.
Or, they can be a smart investment for the veteran real estate investor, looking to purchase his/her 4th property.
The tenant profile (as long as you do your due diligence) is excellent in Toronto.
I own condos in Toronto myself, and they have been a fantastic investment.
But Remember…
Don’t delay.
Buy now and prosper.
If not, you may become a statistic.
You may be priced out of the Toronto real estate market, like so many other people who did not take action.
Happy Investing!
Neil
Leave a Reply