The Bank of Canada’s announcement last month that they’re holding the overnight rate at 0.5% (where we’ve been for nearly a year now) squashed any chatter about additional, potential rate hikes by Canada’s largest mortgage lenders.
Save for a few increases starting in early January 2016 (largely by the big banks; smaller lenders continue to be more competitive in many cases), mortgage rates have remained low and are likely to stay low through 2016. So, at least for the short term and possibly for the medium term, buyers will continue to enjoy more affordable payments and – with the right contract terms – perhaps even the opportunity to pay down their principal faster.
I was in Vancouver last week during Justin Trudeau’s visit; his car actually pulled up in front of my cab as I was hopping out.
While the hottest topic was the $460 million in federal funding for British Columbia transit (provincial and municipal contributions top that figure up to over $900 million), the housing affordability crisis and listings shortages in over-heated markets like Vancouver and Toronto was a key topic in Trudeau’s interview with CBC Radio Vancouver. Even the prices of Vancouver and Toronto condos are rising well above traditional inflation levels, although they’re still an affordable alternative for buyers priced out of the freehold market in Canada’s two hottest real estate zones.
One of the questions we get asked a lot by buyers looking at investment condos for sale in Toronto – typically pre-construction condos – is whether or not they should pay more to buy a unit on a higher floor.
It’s a question that’s not only critical to real estate investors but end-user buyers as well, since return on investment should be a top priority, regardless of whether a buyer is purchasing the unit as an income property or as a home to move into.
So, should you move up to make more?
May was another hot month for condos for sale in Toronto with price increases exceeding traditional, annual appreciation rates. It’s the 905 market that’s the race winner though when it comes to value appreciation trends. While sales prices are obviously below that of Toronto proper, condos and houses in the 905 are outpacing Toronto homes in terms of average year-over-year price growth.
Growth in the condo market has moderated since the craziness we saw in February and March but listings are getting more constrained in the face of increasing demand and prices continue to rise. In other words, that slight moderation in year-over-year price growth doesn’t mean condos are getting cheaper with the average Toronto condo sale price nearing $443k. Prices continue to rise each month and May was no exception.
There are more condos in Toronto than ever in our history yet nary a deal to be found. It seems in conflict, doesn’t it? More condos being built and sold, more investors active in the market than ever before, yet rents that continue to rise beyond the reach of many prospective tenants?
Last week, we took a look at the rising cost of Toronto condo rentals. We saw that the average cost of a condo for rent in Toronto has shot up to $1,891/month (a 1 bedroom rental condo specifically is hovering around $1,662 / month on average).
The state of Toronto’s condo rental market again made headlines over the last month as the results of 2016’s first quarter trickled in along with more robust 2015 analytics. Yet, despite a consistent picture on paper of skyrocketing condo rents, that picture is, at times, inconsistent with renter & landlord experience of the market, on the ground.
So, are condos for rent in Toronto truly in short supply creating a landlord’s market or are there still deals to be found for renters? And if so, how should renters go about their search?