WHY SHOULD I INVEST IN TORONTO REAL ESTATE?
The Equity Gains Are Real When Buying an Investment Property in Toronto
Investing in Toronto real estate, when done wisely, can be very fruitful. Since 2015, condo prices in the 416 (Toronto Proper) have risen 52% according to TREB data. To put that in perspective, if you had purchased a condo in 2015 for $400,000, you would have made over $200,000 (or $50,000 per year) just by living there. These high equity gains when investing in Toronto real estate is one of the reasons why Toronto is one of the best places in Canada to invest in real estate.
And that’s just the Toronto average price. When you have a proper condo investment strategy, you can make better returns, faster. Some of my real estate investors have already earned between 13% and 27% on their 2018 investments. Have a look at some of my client returns here.
Stable & Increasing Demand for Rental Inventory
Investing in Toronto real estate is still very profitable and with Toronto’s growing population, the demand for rentals remains stable. Covid may have had its time and lowered rental demand but that was temporary and we’re already on the up-and-up. With college students returning to school and immigration expected to reach record-breaking levels, we anticipate stable but increasing demand for rental inventory.
Both immigration and educational opportunities are bringing a surplus of qualified residents to the city.
In 2019, the Huffington Post published that Toronto is the fastest growing city in the U.S and Canada with an increase of 77,435 new residents between July 2017 and July 2018. In 2021 Canada aimed to welcome 401,000 new immigrants, has already landed over 70,000 in the first quarter alone and plans to tie record immigration levels set in 1913.
With major developments like East Harbour and our growing tech industry, and several high-profile tech companies choosing to set up shop in Toronto (Google, Uber, Pinterest, and Microsoft to name a few), the demand for available rentals will continue to climb.
Pair that with Toronto’s record high rental rates — one bedroom condos currently rent for about $2,225 per month — and it’s easy to see how your tenant can help pay down your mortgage.
It’s also worth noting that the Ford government has lifted rent control on new units, including pre-construction condos, which are being leased for the first time. You can read more about the rent control amendment here.
Canada’s Stringent Lending Practices Keep You Protected
Buying investment property in Canada is a safe investment because of the many guidelines they’ve introduced, including the Stress Test at the beginning of 2018 which was actually raised to a higher Stress Test threshold in June of 2021. We’re also VERY WELL FUNDED. Believe it or not, Canada has an extremely low delinquency rate. As of 2021 it was 0.25% — the lowest level reported in 5 years. Canadians may be mortgaged to the hilt, but Canada’s loan default rate remains tiny. Canadians will do anything to ensure they don’t miss those payments.