Finding Opportunity in the Hot Toronto Market

It is a fascinating time for the North American real estate industry. Supply is depleted, prices are up and everyone from Boomers to Millennials to economic analysts and real estate experts are trying to figure out what will happen next. 


Make no doubt about it – good old fashioned undeveloped lots are now far more valuable. 


A vacant patch of land just hit the Toronto real estate market for almost $1 million. There is no infrastructure on it, which prompted the CTV News article. Much is ado in the Toronto housing market – including undeveloped lots selling for way more than many people would like or expect. 


On the opposite side of the nation is Vancouver, which is dealing with the same real estate surge – almost as if two of Canada’s largest cities are competing for the notoriety of being one of the most expensive housing markets in the world. 


Boomers bought before the housing market boom and are holding fast, just as Millennials are vying to buy into a housing market that has increased by 128% in the last decade. Homes now come with price tags that translate into people needing six figure incomes to even dip a toe into the water of the hot Toronto market. 


The Globe and Mail just published an article asking yet another question about the nebulous housing market: Are investors driving up the prices in an already booming market? One in every five Canadian homes are owned by investors. 


Still, there is more news on the horizon that may alter things a bit: higher interest rates. 


But according to The Financial Post, Bank of Canada Governor Tiff Macklem will need to be mindful of ripple effects from any policy changes. It seems the current housing situation can be at least partially credited to Covid-19 inspired record-low interest rates, which caused housing prices to climb over 11% from this time last year. 

Considering all the factors at play, is real estate – particularly in Canada – still a wise investment? 


A different Financial Post article confronted that question: “If you have found yourself in the market for real estate recently, you know only too well how frustrating it can be. But even beyond frustrating, it is expensive … really expensive. Multiple bids and blind bidding are driving prices up from small-town Nova Scotia to large urban centres in British Columbia. And yet, thanks to low-interest rates, increased savings and foreign investments, the cost of housing continues to rise. The question is, is there still money to be made in real estate?”


The Canadian Real Estate Magazine claims there is. 


“Real estate investing is one of the safest, risk-free ways to earn money from investments. Since the housing market in Canada is booming, houses are seeing an increase in appreciation over a short period of time,” according to the article. “As an investor, building home equity for financial gains can typically be a long waiting game that could take years, whereas, in Canada, the market is so hot that homes are seeing appreciation in value on a month-to-month basis.” 



But, as the Financial Times article points-out, it is good to think outside the box when it comes to moving into the Canadian market. Turn-key primary residences are being scooped up faster than they can be built. It is not a bad idea to look at fixer-uppers or explore purchasing a vacation property that can be rented when you are not there. Pre-sale condo assignments are another creative opportunity. 


Like any other major move, do exhaustive research. And when you think you are done researching? Do some more research. There are still opportunities in the hot Toronto real estate market. 


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