Every year as real estate putters on in Toronto we always hear about a crash in Toronto. There are these huge fears of a bubble and that prices are going to correct themselves by as much as 35%! I’ve been hearing about these bubbles since I first started in real estate. The only thing that came close to a crash was back in 2008/2009 when the US market came to huge correction. The fear from that crash caused our market to freeze. No one was buying or selling in Toronto unless it was 100% necessary. That is one thing about markets, people will always tend to follow the herd.
After about 8 months, the Toronto market bounced back up and prices were just about what they were before the market froze. I know during this time that buying property was ideal. One has to remember that Toronto on average sees about 40,000 net migration of new residents. Since the city is not building that many more apartment buildings, the rental market needs an influx of rental residents which are being supplied by condos. The current average of condos that come on the market is about 19,000. Do you see the problem? This is why Toronto’s vacancy rate is about 1%. Try finding a rental in the city and you will see the pain of being a tenant in Toronto.
Prices as of December 2014 according to TREB shows that detached homes have increased year over year at 7% and even condos have shown a 4.5% increase. With prime rate being dropped by some major banks, the buying power of condo buyers have just increase a little. I foresee a jump in prices again, but don’t think they will increase much more than what we have been experiencing in the last couple of years.
Choose areas wisely when buying, and check out the trends for the parts of the city that you are looking to purchase in.