So you think the Toronto real estate market is poised for a correction. Well I am here to say that you are absolutely right!
No investment or asset value goes up in a straight line. Each will experience periods of corrections. Yes, even the high flying Toronto real estate market. Heck it has happened before many times. Just like it did in the late 1980’s and early 1990’s?
But here’s the thing. No one. and I mean no one, knows when it will happen and what will cause it to happen.
Those hoping for a correction to get into the increasingly unaffordable Toronto real estate market can easily still find themselves being priced out of the market, even when the correction finally occurs.
Let me explain.
Today, the average cost for a fully detached Toronto home is around $1.3 million dollars making it out of reach of the vast majority of first time buyers, who may be praying for a 30-50% correction in the market so that they can finally be able to jump into home ownership.
Here’s the issue with this plan.
Last year Toronto home prices increased by nearly 20% and looking at the latest developments for the Toronto real estate market, the already crazy prices are expected to go even higher.
In fact, today the news is abuzz with how the Vancouver real estate tax imposed on foreign buyers will see Toronto real estate prices pressured even higher. You can read all about it here.
So let’s say you are currently hoping for a 30% correction on that average $1.3 million Toronto home, but the market continues moving up by 20% per year like it did last year.
This would mean that same house would be valued at $1.87 million 2 years from now and even if a 30% correction were to occur in 2 years time that house would then only fall to $1.31 million. Yes, it would only fall back to a price that is even higher than today!
The reality is that many so-called real estate gurus have been calling for a correction in the Toronto real estate market since as early as 2004 at a time when the average fully detached home was priced well below $500,000!
To get back to $500,000 home prices in Toronto would need to plummet by about 62% from today’s prices. For perspective, this would be way worse than the real estate crash experienced by the US during the fallout from the financial crisis and resulting Great Recession.
In fact, I would highly expect the latest developments in Vancouver to not only impact the entire GTA but real estate prices across the entire Golden Horseshoe Region!
So, if you are hopelessly searching for an affordable home in a great area or a great cash flow positive investment property I have some great news for you.
I have been doing what most Toronto real estate agents have been unable to do.
I continue to successfully find amazing and affordable homes for my first time home buyer and real estate investor clients alike, all across the Golden Horseshoe, in some truly great areas and within commuting distance of the GTA that they absolutely love.
BONUS: Many of these same properties have been appreciating at the same rates or even higher than those located in the Toronto.
So stop stressing and start living!
Contact me, Your Real Estate CFO today to discuss your unique, realistic and innovative solutions that can work for you now!
It’s not too late. Yes you can achieve your dream of home ownership and some truly spectacular returns on your investments today.
Please note that I only work with 3-5 clients per month, so my availability is extremely limited. The great news is that a few rarely available spots just opened up.
Email me at: Felix@Cloud9Life.ca or call me at (416)617-2559 for your free 20 minute consultation today, before some else does!
Until next time…
Felix
You Real Estate CFO
C: (416)617-2559
E: felix@cloud9life.ca
