Solid reasons proving that a property is the best investment move



For quite some time, Toronto’s real estate market has been attracting quite a many an investor, especially in its real estate. Many have been looking to buy, rent & sell residential and commercial properties for a handsome profit.

Historical records have been showing that profits have been quite high after selling real estate in the greater Toronto area which has been providing investors with a strong return on investment. This has also created more demand in the city and in the greater Toronto area as well.

If you are considering investing in real estate, especially in Toronto; then you are in for a great surprise. Let us share with you five solid reasons why you should invest in Toronto’s real estate by buying a condo (the greater Toronto area is included as well): 

1. An opportunity for high-value appreciation:

Appreciation of value takes place when buyers sell their investment property for a value higher than that of investment. Residential properties in the greater Toronto area, especially condominiums (condos), have had a great run in the past several years (just like detached and semi-detached homes).

Investors must always have a thorough look at which kind of property to invest in by having a look at the most recent market trends. 

2. Toronto has a wide variety in residential properties:

A fascinating fact to know is that Toronto has a wide range of options in residential properties to choose from. Apartments, condominiums, duplexes, multi-family buildings, single-family homes, homes having secondary suits and mixed-use residential/commercial developments are the types of real estate found in the greater Toronto area.

In the city, numerous projects have been constructed (and some are under construction too) that are worth considering if you are looking to buy it in order to turn a profit. Such is dependent upon our investment goals as you can easily find the type of property according to your income to suit your needs. 

3. Equity gains are real when investing in a residential property in the Greater Toronto Area:

If conducted wisely, investing in Toronto’s residential properties can be quite fruitful. Since 2015, There has been a 52% rise in condominium prices in Toronto city proper. Meaning, anyone who purchased a condo for $300,000 in 2015 would have easily made $200,000 in equity by 2019 ($50,000 annually).

The real-time lucrative equity gains are the reason why investors are shifting their focus from Vancouver to Toronto. A lot of people have made significant gains by a margin of 10-15% annually. 

4. A huge demand for rental property:

Investing in Toronto’s real estate has never let anyone down. The city is Canada’s largest and fastest growing, where the demand for rental property has always been at an all time high. The demand has recently taken a slightly upward turn.

Such a growth should be credited to the friendly immigration policies of Canada as well as the growing tech industry, which have attracted countless educated residents to the greater Toronto area in recent years.

The Huffington Post published last year that the greater Toronto area has been the fastest growing metropolitan areas in entire North America. Between 2017 and 2018, the area saw an increase of 77,435 new residents. It also resulted in several high-profile tech companies to set up offices in Toronto, among them being Microsoft, Pinterest, Uber, and Xerox.

Because of this phenomenon, the demand for available units for rent started climbing. The average rent of studio condo is around $2300 per month. Through this, property owners can be helped by their respective tenants in paying down the mortgage. 

5. Stringent lending practices keep property owners and investors safe:

Buying residential property as a first time (or consequent) investment because of strict lending practices introduced. Among them is the credit stress test which was implemented in the early part of 2018. This has helped minimize the loan default rate in Canada at around 0.3 percent, which ensures that mortgage payers do not miss out on any payment. 

Investing in Real Estate in the GTA – is buying a condominium a right move for the current year?

The biggest gains in Greater Toronto Area’s real estate market is none other than Condominiums. Condo prices in Toronto city proper as well as the adjoining areas have risen on average of 13% annually since 2015.

The number of condos for sale Toronto has risen exponentially to providing buyers and investors a prime opportunity to make the best investment move. The best performing areas for Condos in the Greater Toronto Area are Etobicoke, North York, Downtown, York University Heights, Scarborough, Birchcliff and Parkdale.

The city’s average historical growth rate in real estate prices for the past 10 years has been 5%. Recently, these prices have been averaging over 10% annually. Though there is the news of a slowdown in Toronto’s real estate market, the prices have been appreciating as demand outpaces supply.

Home prices in the Greater Toronto Area have seen an increase 2.2 percent in the 4th Quarter of 2019. Though Montreal has seen the strongest home price appreciation rate in a decade, Toronto is witnessing the same as well but at an exponential margin.

Following the dip in Vancouver’s home prices (which have resulted in home price stabilization there too), investors have shifted their focus towards eastern Canada, with Montreal and Toronto becoming the beneficiaries of their investments.

Another thing has been observed. Home construction in Canada had hit a record high in 2017, but after that, it has been on a decline. The Canada Mortgage and Housing Corporation (CMHC) said the total number of homes that began construction in 2019 would be the same for this year and the next, keeping in consideration the historical average for annual home construction.

Coupling the strong economic outlook with a strong labor market makes construction on new projects a likelihood, household formation during this period will slow down, as the CMHC predicts. Economic recovery is in full swing and the Canadian market looks to be on a stronger course in the years to come.

What does this mean for first time buyers? This means that the property they wish to buy for investment (especially a condo) will not lose its value. Though pricing controls might restrict the appreciation value of the property for some time; it will still give property owners a good profit making it the best investment move of their lifetime.