From Condos to Homes, Here’s What You Need to Know About the Toronto Market
According to the 2018
RE/MAX Spotlight on Luxury Report
, sales of single-detached homes priced between $1-2 million have declined in Toronto—down 35 percent year-over-year. However, condominiums in the same price range remain popular, particularly in larger urban areas. In particular, Toronto experienced a two-percent increase in luxury condo sales, led largely by baby boomers and millennials.
With the strength of the real estate market over the last few years, many Canadian baby boomers have decided to sell their existing homes, downsizing and upgrading to the luxury condo market for their retirement. At the same time, the lower end of the luxury condo market presents a great opportunity for millennials looking to enter the housing market.
Similarly, investors are eyeing the luxury condo market, as a dwindling supply of available single-detached homes forces many potential home buyers to consider renting a condo. With rising rents, this presents a great opportunity for investors to see a return on their investment.
There are myriad factors that play into the success of the Toronto luxury home market. As 2019 approaches, watch for these trends to continue:
1. Demand Will Make Toronto a Must-watch Market
According to the
PwC Emerging Trends Report
, net immigration into the Greater Toronto Area hit a 15-year high recently. This, paired with a pent-up demand for housing, is making Toronto a must-watch market in 2019—even outpacing Vancouver.
2. Affordability Will Continue to Be an Issue
The same PwC report indicates that industry insiders are concerned that Toronto land costs will hit Vancouver levels soon. They anticipate the next year will be a buyer’s market before starting to move back to a seller’s market—at which time prices will ramp up to new highs. This will put an already expensive market even more out of reach for many buyers.
3. Other Areas of the Market Are Strong, Too
The Toronto office sector is also doing quite well, as the vacancy rate for downtown office space sank to 3.4 percent in mid-2018. Supply is likely to get even tighter as new construction is completed. The technology industry’s need for office space is partially fueling this demand. Similarly, the industrial sector’s demand is being fueled by e-commerce growth and continues to push developers to increase supply.
If you’re interested in buying or selling Toronto luxury homes, it is imperative to work with a real estate professional who has their finger on the pulse of the market. Each real estate transaction and opportunity have different factors that can contribute to their success or failure, and knowing the market is just the first step. Schedule a consultation today.