It is rarely ever talked about in the media, but here is a BNN article that finally gets what has and continuous to truly drive the Toronto, and indeed the entire Golden Horseshoe, real estate market. This is why low rise home appreciation rates will continue to outperform high rise condos.
Those looking to buy a fully detached single family home with a backyard may already feel like it is becoming a pipe dream. This type of housing is quickly getting out of affordable reach for the many, many people looking to get into the market. It is almost becoming akin to dreaming of buying one of the estate home mansions on Post Road or Bridlepath in Toronto only 10-15 years ago.
A million dollar plus house is no longer considered a status symbol. It has now become the price of entry in the GTA for those hoping to buy even a small fully detached home in a decent area of the city.
In fact, if we continue on this current trajectory, as the BNN article below suggests, we very well could see the $350K investment properties my clients and I are buying today in my target areas be worth over $1M within the next 10-15 years! Sounds crazy right? Well that is exactly what has happened in the GTA over the same time period.
Indeed, home appreciation rates in most of the areas I target are higher than even Toronto today!
Surprised? Don’t be.
The real reason is actually very simple Economics 101: Very low supply (inventory) combined with massive demand for affordable freehold homes with actual land, located within reasonable commuting distances of downtown Toronto, will continue to pressure pricing upwards. With over 1 million new expected to move to the GTA over the next 10 years this demand will show little signs of easing.
Now you know why Toronto freehold properties continue to get more expensive and less affordable to most first time buyers. If these first time buyers still have a need and wish to purchase a freehold property they need to look outside the confines of the GTA.
This, combined with the fact many of these properties can still be purchased under $500,000 and can still be purchased for only 5% down, which is something no longer possible in the GTA, makes them very hot commodities indeed.