Real Estate Predictions for Toronto Business Investors in 2020!
What makes Toronto unique along with the likes of Hong Kong, London, New York, Sydney, Stockholm, San Francisco, Tokyo and Melbourne? First, the city is a magnet for business, finance, innovation, technology and metropolitan culture.
Second, Toronto is an international city and more immigrants per capita in comparison to the aforementioned cities. Third, the city’s housing market is expensive. Hong Kong, Sydney, and Melbourne are most expensive among those mentioned above but when it comes to Toronto, its homes are more expensive than American homes.
The Greater Toronto Area’s (GTA) real estate prices are between stable & rising. However, metropolitan Toronto & its adjoining inner suburbs are becoming expensive. Market conditions are such that sellers have all the negotiating advantages, not the buyers.
This has resulted in the average Toronto household being left unable to afford houses in the current situation. This has arisen due to supply shortage due to price increase (which is neither due to interest nor mortgage rates).
Areas such as Aurora and Richmond Hill have experienced a decline in housing prices within the previous year. Prices in Markham have been flat. If prices continue to decline in these suburbs of the Greater Toronto Area (GTA) then inner areas & suburbs of Toronto may witness a similar price softening.
Burlington, however, has witnessed some of the greatest increases in housing prices over the past year. The silver lining for those betting on higher prices is that foreign investors who speculated on property prices have completely shifted their focus from Western Canada towards Toronto, Ottawa and Montreal.
Also, these foreign investors aren’t looking for suburban houses. Their favorite investment in Toronto’s real estate is Condominiums. Prices of Toronto Condo are rising sharply and so are those of houses, apartments and retail space.
Do rising prices mean people are buying homes in Toronto?
Despite the rise in prices, the number of people buying homes has come down by 25% from 2016. Some people are pinning the blame on higher interest rates and subsequent tight mortgage rules on weaker markets.
Somehow, these arguments are neither holding any strength nor are they supported by any evidence.
Mortgage rates are still at all-time low rates and the market began getting weak from 2017 when foreign buyer taxes came into effect. In 2018, the stress test was introduced. Housing prices in Toronto have weakened primarily due to the shift of foreign direct investment in properties in Ottawa and Montreal.
Torontonians like comparing their cities to other Canadian, American and Global cities in terms of real estate price indicators. What should be understood is that such conditions of real estate are being witnessed in London, Sydney, Stockholm, San Francisco, New York, and Los Angeles.
The weakening of real estate markets in these cities indicates a synchronized pattern of global real estate slowdown.
What are the predictions for Toronto’s real estate for the year 2020?
The two-year residential market slowdown Canada had experience is now over, as stated in a declaration from the Canada Mortgage and Housing Corporation (CMHC) in its comprehensive report released recently.
While potential buyers are taking inspiration from the news of the current decline in interest rates for the year 2020, the market is still robust in the ending days of 2019 with monthly housing starts being the strongest and showing no signs of a slow down for next year.
Canadians are yet to witness the fall-out of the electoral victory of the Liberal Party in the current federal elections.
Here are some predictions for Toronto’s real estate for the year 2020:
- Between 2020 and 2021, property sales for Canadians will rise
Everyone involved in real estate across all of Canada remembers the real estate crash of 2018. When the market showed signs of recovery this year, there are indications that positive happenings will take place in the coming days.In the provinces of British Columbia and Ontario, urgent sales for residential properties will be happening up to 2021. A part of this can be accounted for by an increase in disposable income which is expected to occur within these two provinces.
Key markets of residential real estate in Canada are stepping up which thereby raises Toronto’s ranks in the global home price marketplace. With investors shifting property investment focus towards Toronto and Eastern Canada, There is a rise in the number of Condos in Toronto for sale you can check the updated condos listings on Toronto Condo Team.
- Home prices are rising
Canada’s housing market has awoken, since the halt created by the stress-test. Sales endured a slowdown and home prices were slowly rising. But such is expected to improve by drastic margins in the provinces of Ontario & Quebec.By 2021, the real estate market of British Columbia will push Quebec into third for price growth. Other provinces in Canada are expected to make moderate price gains but no decrease in housing prices.
- New construction in residential properties will be slow
When home construction reached a 10-year high in 2017, it has since been on a decline. The Canada Mortgage and Housing Corporation (CMHC) says that the total number of homes that started construction in 2019 is the same that Canadians should expect for both the years 2020 and 2021. This is in line with the historical Canadian average for homes constructed annually.Coupling this with a strong labor market and a robust economic outcome, Construction on new residential projects is most likely to be possible. But the CMHC warns that household creation will slow down during this time period.
Conclusion
The Canadian economy is on the rise and Canada’s real estate markets will be on the upward curve for the next couple of years. Canada’s real estate is more expensive than that of the United States and is coming on the line with Hong Kong and Australia.
Housing affordability in Canada was a highly debated topic in the 2019 Canadian Federal Elections. Vancouver has always been Canada’s most expensive real estate market. That status is now moving eastwards into Ontario and Quebec as investors are now investing in real estate of these two provinces.
Hence, if you find a Toronto Loft at a price that is low among others then it would be best that you purchase it soon because investment in real estate is one of the best investments you can ever make.