The market is extremely hot right now. Both Condos and Houses are going into multiple offer scenarios. Almost all houses have a bidding war attached to them if they are in any sort of decent area. With condos we are finding that as long as it has some sort of unique feature or its at least is in a popular building or neighborhood then it has a good shot of going into multiples.
The housing market is quite easy to explain. Its simple supply and demand. Right now there is roughly 10 to 15 buyers for every single house! The less there is of something the more likely that product is going to go up. Seeing 10% increase per year on your house is now the norm. THERE IS NO MORE LAND! What you see is what you get. There is literally partial blocks of houses being ripped down in certain neighborhoods to build more condos. The inventory for homes is decreasing everyday and the market share is increasing for condos every single day. Buying a house is not just an investment it’s a license to print money. The price you buy your house at today will be galactic-ally higher if you plan to sell it in 25 years.
I have had clients that have said to me “the market is eventually going to come down” NO ITS NOT! These prices are not going anywhere but up. Toronto is a global city and if you take a look at major cities around the world we are extremely well priced. In fact go compare what it costs to own A HOUSE not condo in any of those cities. You want a townhouse in Manhattan….it’s 10 million all day long. Now of course we haven’t reached those levels yet but we are certainly heading towards that.
People tell me all the time “well we aren’t Manhattan and we will never get to that level” Well…..maybe not but guess who currently has more 40+ story buildings being built than anywhere in the WORLD…..yep….its us. Toronto is the financial Hub of Canada, we have more people immigrate to this city than anywhere else in the country. Not only that due to the fact that the commute times are so bad and won’t be getting better, we have a flood of people moving in from the suburbs. Hey they can save 4 hours day commuting, can save 700 bucks a month in gas, less maintenance on their vehicle, maybe even trade in a car….they just have to sacrifice some space, and for them the trade off is worth it!
There is also a trend in big business’s moving back into the city. To put it simply, the suburbs has lost its sheen…in the 1950’s the suburbs were the future…the city was seen as dingy. Now many young workers and boomers want to live in these exciting densely packed mixed use communities that don’t require cars. An area where residences, shops, parks, schools and other amenities are all close together.
Even if there was some sort of crash, Toronto would not be affected like the rest of the country…especially the house market. Hey we may go from 20 offers per house down to 5 per house. But lets just say for argument sake there was a downturn. Lets take a look at the recent past to see how long these downturns have lasted. Stock Market crash, y2k, Tech Bubble, 911, the Rent vs Buy media push….all of these lasted 3 to 9 months. The blip will be short and it will burst back up again. Even if rates go up…renting your place out is a viable option. The vacancy rate in Toronto is less than 1% and if you have any sort of capable realtor he should be able to take care of that for you.
Eventually houses in Toronto will only be for the rich. I know people really don’t want to hear that but its true. Prices are already more than what most people can afford and there is absolutely no sign of its slowing down. Just last year 100k buffer gave you a solid shot to win a bidding war….now if your not prepared to go 150k over, you basically have no shot. This is of course is pertaining to desirable homes.
I predict in the not so distant future you are going to see more family style condos. Three and 4 bedroom condos built for families and not so much for the investor. There are many families moving back into the city and will continue to do so. For a lot of these people a condo will be their only option and there needs to be a market to house these people.
These are exciting times as we watch our Toronto grow and shape the new landscape for real estate.