THE TIME IS NOW TO INVEST IN TORONTO

CLIENTS ALWAYS ASK US IF TORONTO IS A GOOD INVESTMENT OPPORTUNITY

HERE’S YOUR ANSWER:

Toronto is becoming a world-class city where long-term demand for real estate remains strong. However the high volume of sales seems to be waning. As Toronto based developer, Brad Lamb succinctly put it, “our future is lower sales volume, more tenants, and higher prices. Toronto will not go backwards for any sustained period. In the next three to five years, supply could drop as much as 30- 50%. Evan Sidal, Head of the Canadian and Home Mortgaging Corporation concedes, “if I were concerned about anything from a long-term housing market point of view, it’s the supply of housing in Toronto.” In a CMHC report, over 20 new homes were built in Toronto for each one demolished in 2016. This is dramatically different from 2011 where the replacement rate was 70 to 1. Government red tape has made it more difficult for developers. Bryan Tuckey, Former Head of BILD stated, “developers now have to satisfy about 200 conditions, from protecting species at risk to transport requirements, to get municipal approval. That compared with about 25 at the start of the last decade. Despite the growth plan’s preference for multi-family housing, such projects can now take more than three years to complete, double what it was 15 years ago, because of a surge in required documentation, out-of-date municipal zoning bylaws and residents’ opposition to high-rise projects.” This is why there is a projected housing shortage in the near future.

Also, there continues to be a huge influx of people coming to the GTA. The province of Ontario estimates that by 2031, the population of the GTA alone will reach 8.5 million. This is approximately the current population of London, England. In fact, some estimates are that the GTA will need to produce as many as 500,000 new homes between now and 2031 just to keep up with this demand. The current average is around 34,000 per year.

While much of the demand for real estate may be attributed to Immigration, there is also significant demand coming from within Canada. Currently, more than 7.3 million millennials are living in Canada. This makes them the largest age group since the boomers. According to a recent study put out by the Ontario Real Estate Association (OREA), in the Greater Toronto Area alone, 700,000 millennials will be in the market for a home in the next decade. Much of this purchasing power is expected to be from the transfer of generation wealth and should have a significant impact on the demand for resale sites in Toronto.

Another example of the growth of the GTA is found in the tech sector. According to a CBRE study, Toronto is now the fastest growing tech-hub in the world. From 2012 – 2018, the city introduced 82,100 highly skilled and high paying job opportunities in the technology sector, higher than both New York and Silicon Valley. For millennials or immigrants searching for tech careers in the new economy, Toronto is either where you want to be or where you will end up living. Tech giants are coming to Toronto. They are buying, renting and developing downtown real estate. Google is in the process of developing the world’s first Smart City in Toronto. This is expected to revolutionize the way cities are built and experienced. It is slated for construction on Toronto’s east end. The estimated investment for our city in the Google Development alone is enormous! On the west end, Shopify just doubled down on its Toronto presence. They are building a new home at Front and Spadina. Uber will also be spending hundreds of millions on its new downtown Toronto facility.

In the past, Toronto has been criticized as only being a financial and services hub. However, the Toronto economy is diversifying, while becoming a world leader for tech hubs.

For these reasons and more, the future of Toronto Real Estate still seems to be very bright.