Toronto is Canada’s most sizzling city. It has a vibrant culture, amazing architecture, a diverse historical background and an educated population. This is why the housing market from the past few years has been largely immune to the contrasting experiences in other parts of the country. In most cases, both residential and commercial properties have maintained or gained new territory in the last couple of years.
Toronto real estate is considered a pillar of strength on the Canadian market during the past ten years. The value of Toronto properties for the coming years is given by organizations like the CMHC (Canada Mortgage and Housing Corporation) by using key factors like mortgage rates, income and employment, net migration and demographics.
Mortgage rates are having an impact on Toronto’s real estate market because higher rates could reduce the housing demand. In other words, the higher the mortgage rates, the higher the price of a house gets, therefore, higher mortgage rates could add too much pressure for first-time homebuyers in Toronto. During the last few years, mortgage rates have been going slightly up in Toronto, so experts predict there is going to be a rise in the cost of Toronto properties.
Two main factors contribute to the faith in the Toronto market: the level of employment and population’s average income. Citizens of Toronto, and Canadians in general, have full-time jobs, and also, the workers’ income will continue to rise, due to the country’s general need for work force. This in return, will boost the demand for property because of the increased employment rate and higher income, which leaves people more money to spend.
However, while the numbers are still encouraging, things don’t stand as they used to during the past few years. In addition, net migration is also having an impact on Toronto’s housing market due to the same reason: the overall purchasing power of the population. More tourists could mean more potential investors and buyers, which could reduce the impact of the high mortgage rates.
Statistics have shown that migration will still play a major role and although the exact numbers are unknown, foreigners, mainly Iranians and Koreans, have already purchased a significant number of luxury properties in Toronto. In fact, foreign investors are one of the main buyers of luxury real estate in Toronto.
The Canadian demographics is also a decisive factor in the future of the market. The population of Canada is aging, so the birth rate is decreasing. Given the decline in the natural population, the demand for Toronto real estate will also slightly drop, but the influx of foreign investors can reduce the impact of the aging population.
To conclude, Toronto is still one of the most competitive locations in real estate today. And since time is of the essence, now it’s the best time to close your property transactions.
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