Looking for real estate in Canada? It’s likely that you’ve noticed how pricey the real estate market can be in Toronto. In comparison to other Canadian cities, Toronto takes the cake for one of the most expensive markets in the country. But why is Toronto real estate so expensive?
This article aims to answer that question. It is likely not just one reason for Toronto’s spike in home prices, but a multitude of reasons; supply and demand, the convenience of amenities, an abundance of opportunity, and an increase in tourists are contributing factors. Below, we will dive into some of these factors and give you a better understanding of the Toronto real estate market. Who knows? Once you get past the initial price point, you may find that Toronto is the perfect place for your next home!
Supply and Demand
The main reason Toronto real estate is so expensive is a simple supply and demand issue. When the demand is higher than the supply, prices will go up in any market. This rule applies to real estate just as it does to anything else. Toronto has a high demand for housing due to limited space and a jump in people moving to the area. The result? Higher prices tags on Toronto homes.
Limited Space
Toronto has limited land available compared to other cities across Canada and beyond. Why does this matter? Because it means that there is only so much room for building new properties (and developing existing ones).
Toronto is a growing city, and it’s quickly running out of space to build on. Why? Toronto sits between two bodies of water – Lake Ontario to the south and Etobicoke Creek to the west. The Don River also cuts through Toronto just east of the downtown area before running into the lake. This leaves Toronto with some space to build, but not a lot when considering how many people are looking for homes.
Even the space that Toronto does have is quite limited. a lot of baby boomers in the area bought their homes when the market was more affordable, and those same homeowners are holding tightly to their homes. In fact, many decide to pass down their homes from generation to generation, so these older homes rarely get listed.
Population Growth
The population is rapidly growing throughout Toronto, with a 0.94% increase in residents year-over-year. As the biggest city in the country, people from within and outside of Canada move to Toronto to get their share of big-city opportunities. As a result of this large influx of Toronto residents, the housing supply in Toronto goes down while the demand goes up. Why are so many people moving to the city? Keep reading to see some of Toronto’s offerings that make it well worth the price tag.
Convenience
One of the most attractive things about Toronto is how much access residents have to amenities, activities, transportation, and more! Part of the reason why Toronto real estate is so expensive is that people are willing to pay for convenience. When your new home is right in the middle of everything you need, it makes a world of difference in your day-to-day life.
You’re Never Far From Amenities
Whether you need to grocery shop, buy gifts for someone, get your car washed, or get some fresh air, Toronto offers it all within 20 minutes. The abundance of restaurants, shops, and attractions accessible in Toronto make it a hot-spot for new residents, so even though the housing price can be pricey in comparison to other Canadian cities, it is worth it; especially considering what you’ll be able to save by not necessarily needing your own vehicle.
Getting From Point A to Point B
Toronto is an effortless city to live in. Why? You can walk almost anywhere, and it has an extensive public transit system (like the TTC) that has access to multiple modes of transportation such as:
- Buses
- Streetcars
- Subway trains
- Light rail/LRT lines
- GO Transit
- Water Taxis
The Best Schools in Canada
When you pay for a home in Toronto, you are also paying for some of the best schools in Canada. Toronto has a variety of public and private schools that offer different programs for students from kindergarten to post-secondary education. Within those public and private schools, you’ll also find options for religious education, french-immersive education, and Montessori schooling.
Once you get past the number of primary and secondary schools, you’ll find that Toronto holds some prestigious colleges and universities. University of Toronto, York University, Ryerson University, and George Brown College all have campuses in the city, giving residents incredible access to higher education.
Opportunity
Think of the top reason people choose to move to a new city: opportunity. Whether it’s for a job, a hobby, or starting a new career, moving can lead to a fresh start for anyone.
Career Options
As Canada’s financial hub, Toronto is one of the top cities in the entire country for career opportunities. You’re not only paying for a new home when you move to Toronto, you’re also paying for an abundance of opportunities.
Toronto’s financial sector has always been its top economic contributor, which continues to ring true today. All five of Canada’s largest banks have headquarters in the city, and the Bay Street financial district is comparable to Wall Street in New York. Toronto’s tech sector has also been rapidly growing over the past few years, earning it the nickname “Silicon Valley of the North”. Media and Entertainment have grown in the area as well, given that Canada provides a lower cost production than most places in the U.S. In addition, tourism in Toronto only continues to grow, so there are plenty of opportunities for residents in that industry. No matter your career ambitions, Toronto is an excellent place for you to thrive.
Quality of Life
Aside from the city’s career opportunities, Toronto provides an incredible quality of life. Here are just a few of the recent titles Toronto has earned as of late:
- 2nd in North America in Mercer’s Quality of Life Report
- 7th in The Economist’s Global Liveability Index
- Fastest growing city in U.S and Canada by The Huffington Post
Why is Toronto Real Estate So Expensive?
In conclusion, the reason for Toronto’s high price tag lies primarily in an imbalance in supply and demand. Several things make Toronto an ideal place to live, including access to opportunities, attractions, public transportation, and quality of life. With Toronto being such an attractive city, it makes sense that more and more people decide to move there. However, with an influx of people comes a decrease in available housing; thus, an increase in prices.
We hope this article has shined some light on the Toronto real estate market and that you are able to see all the perks that come with buying a home in Toronto. Yes, it is expensive to live in Toronto, but if you value the convenience and accessibility that comes with living in a city like this one, then it may just be a great choice for you.
