A record month for the GTA! 11,083 homes sold in September, 42.3 % more than a year ago. As of the end of September, despite Covid, sales were up 1% compared to the same period last year. Proof of the desire for home ownership in Toronto!
Here are two factors that brought many more buyers into the marketplace. The Canadian government gave out 53 billion dollars in aid to Canadians, while at the same time Canadians lost 23 billion dollars in wages. That difference resulted in an 11% net disposable income for Canadians! For some it was spent on toys such as sea-doos snowmobiles and boats, for others it was used as increased down payment for the home that they always wanted. Combined with record low interest rates (1.6% as of today), Canadians who had been priced out of the market were now able to buy a piece of Canada, their home!
While there seems to be a belief that Covid has made the downtown core undesirable and that condominiums have lost value, the reality is that since the beginning of the year condominiums in the 416 area code have gone up 7% and 8% in the 905 area code. Why? Many people want to live downtown where the action is! The second factor is that with such low interest rates the difference between getting a mortgage at 1.8% and 3.5% is about $400 per month on a $480,000 mortgage! Rents may have dropped by $250 per month, but mortgage payments dropped by $400 per month! Investors and Ist time buyers are taking advantage of this opportunity.
Trick question. Will the Pandemic end? Of course it will! And then prices will explode even more than they have this year!
In April we didn't know how Covid would impact us. In October we do. It’s a challenging time for all of us, and hard on families, ultimately we will recover and business and life will go back to a new normal. We all have to change and adjust to today’s new reality!
Today represents a great opportunity in the real estate market, whether to upgrade your home or to buy an investment property. While domestic demand is high, new immigrants and foreign investors have largely been kept out of the market due to travel restrictions.
A great investment opportunity exists today. Rental condominiums. Due to the lack of travel, Airbnb, foreign students, concerns if schools will open, condominium prices, have not increased to the same extent as single-family low-rise homes. For the short term, rental rates have dropped, but with the extremely low interest rates on mortgages, profitability exists, and as the market has proven, things will go back to the way they were before! Airbnb will be back, travel will be back, the students will be back, and single people continue to want to live downtown because that’s where the action is!
Give me a call, let’s talk, let me put my expertise to work for you and your family’s future.
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