If you are currently thinking of buying Toronto condos for sale, you’re not alone. The condo market in Ontario’s capital has seen a price increase of 18% over the past year, and there’s no sign of it slowing down anytime soon. With so many people looking to purchase a unit in the city, either to live in or for rental purposes, it can be hard to know whether now is the right time for you.
Also, this is not a “Yes” or “No” question because there are many things to consider when purchasing real estate, especially in a market as hot as Toronto’s. You should think about things like interest rates and current market conditions, personal preferences, lifestyle considerations, and even family size. It’s important not to rush into anything without knowing all of the facts. To give you some perspective, here are some of the many factors that make this an ideal time for anyone looking to purchase a condo in Toronto.
Condos Appreciate Non-Stop In Toronto
Even with the expected market fluctuations, properties in Toronto’s real estate market ultimately continue to appreciate at a high pace. Toronto’s demand for housing hasn’t dwindled in the last decade or so, and that undoubtedly indicates that it will remain stable in years to come. The reason for the non-stop appreciation is a fundamental economic principle: The housing supply cannot keep up with the increasing demand, leading to soaring prices.
Those market conditions currently affect all property types: detached homes, rowhouses, apartments, and condos. This last segment tends to have a more moderate appreciation than low-rise properties. However, condos in Toronto have had a healthy historical appreciation rate that ranged between 5% and 10% yearly in pre-pandemic years. The condo market slowed down significantly in 2020 due to Covid but has seen a dramatic revival in both the city and suburbs in just one year, with Toronto real estate agents reporting an increased interest in GTA condos since the beginning of 2021.
According to a recent market report from the Toronto Regional Real Estate Board (TRREB), a Toronto condo for sale now has an average price of over $730,000, a surge of about 9% from the same period last year. The record-breaking prices will continue to climb throughout 2022 if projections of a growing population and scarce inventory end up becoming a reality.
Condos Are A Good Investment
Buying a Toronto condo for investment purposes seems to be a good idea right now. Here are some of the reasons:
- With the Covid situation now stable, the city has seen the return of international students and other newcomers looking for immediate housing, which is usually a rental property.
- Now that immigration rates and the number of people relocating to Toronto are back to normal a isthe rental demand is soaring, with high competition and frequent bidding wars for the available units in the city.
- The Greater Toronto Area’s rental market is red-hot, with rent prices climbing 19% in just seven months (February -September 2021).
- The average rent for a condominium in downtown Toronto hit $2,446 the past September. The average price for a condo for rent in the rest of the GTA was $2,373 the same month.
If you purchase the condo to build equity, letting it appreciate over time (probably with the intention of buying a bigger, low-rise property at some point) may also be a good decision considering the current market conditions. Just make sure to have a proper investment strategy.
Condos Are More Affordable
During 2020, Covid-19 inflated the demand for freehold properties among Torontonians with job flexibility who started looking to escape from urban centres to a more spacious, suburban lifestyle. That demand never really declined, and low-rise dwellings continued to experience a staggering price rise, making the Toronto real estate market a solid seller’s ground.
According to recent housing market reports, detached homes in Toronto cost an average of $1.57M, a 30% price increase year-over-year, while the detached houses’ average price of $1.21M is a 27% increase from last year. With this level of competition, many homebuyers are being priced out of houses and, consequently, renewing their condo buying intentions now that pandemic restrictions are relaxing and the economy is back on track.
The spotlight is back on the condo market, with a strong rebound in demand and the already low supply waning faster. That being said, the best time to invest in a Toronto condo for sale was probably yesterday.
Mortgage Rates Remain Stable
There’s not one specific mortgage rate that everyone gets when buying property in Toronto. The rate on your mortgage loan will depend on your particular financial situation and the down payment amount you are willing to give. Additional factors are the type of property you’re purchasing and the home’s location.
In the Toronto real estate market, mortgage rates have jumped up a bit from their 2020 lows, but they remain stable and highly desirable, especially when this is expected to change by 2022. Condo homebuyers should know that getting a mortgage for a condominium requires more effort. They will need to show a solid financial status and successfully pass the current mortgage stress test.
Toronto Is Filled With Perks
Toronto is an excellent place for those looking to live, work, and play in Canada’s most dynamic and multicultural city. If you decide to become a condo homeowner in Ontario’s capital, you will have access to a booming housing and rental market with a stock of condominiums of various sizes, locations, and styles. Locals have an endless supply of parks and green spaces, exciting culinary adventures, and several world-famous cultural events happening year-round.
Toronto is home to some of Canada’s top companies – so if you want a job, there are plenty of opportunities right here! Furthermore, the city boasts over 140 distinct neighbourhoods offering the chance to choose between urban and suburban lifestyles. Toronto is also the perfect city to get a diploma or advance in your career, with several top-tier schools, colleges and universities offering innovative academic programs.
Additional perks Torontonians enjoy include:
- Free healthcare
- Top-class entertainment venues and landmarks
- A strong sports culture
- Living in one of the safest cities in the world
- A great public transit system that makes getting around easy and affordable.
Now that you know the facts, it’s time to analyze your circumstances to decide if you should become a condo buyer right now before prices keep escalating in Toronto or wait a bit longer. Whatever you decide, be sure to have a well-thought condo investment strategy and a Toronto real estate agent by your side to act as your advisor. That way you can make an informed purchase decision.