It’s no secret that the real estate market in places like New York City and San Francisco are extremely hot and seemingly always have been. It’s extremely difficult for the average person to be able to afford the average home in these cities, and even rent can prove to be sky-high.
But you don’t necessarily have to travel far to find a red hot market – you’re sitting in the middle of one right here in Toronto and the surrounding GTA. In fact, Toronto has recently been hailed as having an even hotter housing market than that of the Big Apple. If you already own a home in Toronto, you’ll likely have had the great fortune of realizing a sizeable increase in property value since you bought it, thereby boosting the amount of equity you currently hold in your home.
While the average home in Manhattan is still more expensive than Toronto at $1.25 million, the price of homes in that city has increased 18% over the past 12 months, which is well below Toronto’s pace. And it doesn’t seem to be showing any real signs of slowing down. There’s been plenty of talk about a bubble as of late, but there aren’t any signs that it’s about to burst.
So, why exactly is Toronto’s real estate market so hot? What is contributing to such massive increases in home prices in this city?
Simple. It’s a combination of low inventory, the likelihood that interest rates will continue to hover near historic lows, and a quickly growing population in Southern Ontario, all of which point to the real possibility that the Toronto real estate market could get even hotter.
So, what is a buyer or seller to do? Obviously, owners of real estate in Toronto have been blessed with an increase in equity simply by sitting back and watching as property values continue to rise. If they so choose, they can sell at a sizeable profit compared to what they initially paid for their home, and rake in a handsome profit. Where they head next is debatable, but they may either downsize and pocket much of their profits, or head somewhere outside the city centre where housing prices are slightly lower.
Buyers who have yet to enter the market may be met with some major financial challenges considering how expensive housing is these days. However, they may still want to do everything they can to get into the market to take advantage of the continued upswing in housing prices in Toronto and the GTA. What they may pay for a home today could be worth a lot more in just a few short years. And considering how low interest rates continue to be, now might be as good a time as ever to buy.
Buyers can always start small and get in the market at entry level, such as buying a condo. From there, equity will build, at which point they may be in a better financial position to upsize a little into a larger condo, a townhouse, a semi-detached, or even a single family home, depending on what suits their needs and tastes.
One thing is for certain – the market in Toronto is hot right now, and it’s not showing any signs of letting up. If you’re planning on buying or selling, now might be the perfect time to do so. Get in touch with your trusted real estate professional to get the ball rolling!