No wonder more Canadians are investing. Housing in Toronto naturally comes with so many perks! From thousands of shops and restaurants to being home to one of the best transit systems in North America, Toronto is an extremely attractive place for anyone to call home. To live in the city center of Toronto does mean you will likely be living in a condominium rather than a detached home. This due to the availability and accessibility of detached homes in downtown Toronto. That isn’t necessarily a bad thing though. Some Toronto condos are lived in by buyers, though many are rented out to temporary tenants. Regardless of if you plan to rent out your condo, or live in it yourself, you have to ask yourself, is now the right time to buy? To determine whether you should buy a condo in Toronto right now, evaluate the market forecast, borrowing rate, and availability.
When you make a large investment such as buying real estate, you want to be sure you will make gains rather than losses. Before you buy, let’s evaluate the current Toronto market trends.
Market trends and prices are determined largely by demand. When there is a high demand for housing, the market sees appreciation. The Toronto housing market is notorious for growing at rapid rates as the population increases each year.
In recent years, the annual rate has even been well over 10%. With growth rates like that, your property will be worth double in just over 7 years. For years people have been speculating that prices of housing in Toronto is going to drastically drop, but looking at the history, that theory doesn’t quite seem to fit. For the past 50 years, housing in Toronto has continued to grow fairly steadily only subject to a few minor hits here and there. As for right now, You can expect the market to likely level as the COVID-19 pandemic comes to a resolution; however, once the economy regains traction, housing prices will continue to grow.
When it comes to talking about the actual costs, not just the trends, the average cost for a condo in downtown Toronto is over $700 000. A steep price to pay, though significantly cheaper than the $1 Million price tag for detached homes. There are many single bedrooms, and studio options for well under the average cost as well. Plus, you may be able to afford more than you think.
Incredibly low interest rates
Right now, you can afford quite a lot as a buyer. Borrowing with banks offers you a seriously low interest rate. Thanks to the global pandemic, the Bank of Canada lowered interest rates to a quarter of a percent. That means that mortgage rates are falling as low as 1.64%. With low mortgage interest rates, you can retain more of your real estate investment funds. Even if you obtain a rate of 2%, you will only be paying $2,000 for every $100,000. Interest rates probably won’t drop more than this, ever. If you are going to be borrowing, now is certainly the time to seriously look at investing.
In addition to low interest rates, many new condominiums are only asking for 5% downpayment to purchase a new build. A huge dip from the typical 15%. What this means is you can afford to buy more with your hard earned dollar. It also means you can look for your property sooner.
Now that you know it’s a good time to buy market-wise and you can afford to buy, what’s available? Condominiums are constantly being built in Toronto to accommodate the number of new residents moving to the city. Toronto sees quite a few new residents each year thanks to immigration and job opportunities. You have the growth rate to thank for much of Toronto’s beautiful diversity and various retail and dining options. The city sees a growth rate of nearly 1% each year. To accommodate growth, rather than building out, many developers seek to build up. Buying a new build property right now secures you current prices with future value. As a buyer interested in a condo, this is good news. It means you have a ton of different options to choose from constantly. In fact, over half of Toronto’s properties on the market are Condos. Each month there are an additional 4000 condos added to the market, but just as fast as they go up, they’re sold.
Buyers need to act very quickly in Toronto. Even condos up for sale in Toronto don’t last for more than the average 10 days on the market. This number is even lower when you look at certain types of condos. Studio (bedroom) condos are relatively uncommon on the market and sell the fastest. Multiple bedroom condos sell just as quickly, though there tend to be more available on the market.
New and old condominiums are going up all over the city. In each neighbourhood there are always quite a few available at any given time. Your best strategy to acquire the perfect condo may be to speak with an experienced real estate agent. Agents are experts who can listen to your wants and needs, then search for that daily in your preferred neighbourhoods.
If you’re looking to buy a condo in Toronto, there’s no time like the present. The market does not appear to really be heading towards a crash. In fact, Toronto condos are on their way up in the market quite quickly. Jump in now and watch your investment grow over the years. If you’re worried about being able to afford your dream condo, think again. Thanks to historically low interest rates in Canada, mortgage rates have dipped low as ever, now’s the time to get more for your money! Finally, the number of Condos being completed is perfect for anyone looking to invest. There are new builds in just about every single neighbourhood, but act fast, nothing lasts on the Toronto market! In short, speak with both a financial advisor and a real estate agent to find out what you can afford and where so you can start your move!
Kristy Ngai is a content writer for BreezeMaxWeb that helps businesses showcase their brand through enticing copy. When she’s not working, you can find her playing net in a local beer league or biking around the city.