Toronto Housing Market
Toronto housing market prospered even in a cold economic climate.
What is so special about Toronto real estate market that it managed to prosper even when housing markets in many places of the world took a nosedive?
Factors Driving Toronto Housing Market
- Low bank mortgage interest rates along with the relatively low city of Toronto real estate prices, compared to prices in other mega-cities of the same level. Low prices make mortgage payments equal to or even lower than rent payments.
- Influx of immigrants to Canada. Canada accepts yearly around 250 000 new immigrants, most of them decide to stay in Toronto or the GTA. We are talking about highly qualified immigrants, who quickly find employment and can easily afford buying a house in Toronto.
- Absence of unoccupied land necessary to start new real state development. Toronto has been developing at a fast pace for the past 10 years, absorbing farmlands. Today the land resources available for construction are exhausted.
- Limited number of spaces available in Toronto rental apartment buildings. For the past 10 years, people who rented apartments in Toronto, tried to buy their own homes. This was happening thanks to the low mortgage interest rates and the stable growth rates of the city of Toronto real estate market, which was making investment into real estate in Toronto highly profitable.
As a result, more and more spaces were becoming available in the apartment buildings, which led to the rent reduction.
Managing apartment buildings was becoming less profitable, and many building owners started to convert them into affordable condominiums. This in its turn brought about the reduction of spaces available in the rental apartment buildings that we are experiencing in 2011.
The influx of the new immigrants also contributed to the reduction of spaces in rental apartment buildings in Toronto.
- Inflation is another important factor affecting Toronto real estate market. According to the experts, the current inflation rate in Canada is 1-3% per year. In reality, it's much higher - take, for example, gas prices, TTC fares, food.
- There is one more factor - Canadians, unlike Americans, prefer to not sell the real estate rather than reduce prices during difficult times. This is exactly what happened in 2008 and 2009 after the crisis. Experts predicted drop in prices, house owners withdrew houses from the Toronto real estate market. The limited number of houses for sale contributed to the city of Toronto real estate price increase.
On the webpage Toronto Housing Market - Canada Toronto Real Estate I used materials written by Helen Riabinin, Sales Representative, Century 21 St.Andrew's Realty Inc. for Russian Toronto.
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