Buying a condo in 2022 is a great move. We are seeing would-be homeowners returning to Toronto’s downtown core, as well as tenants as life returns to a new form of normalcy.
Some companies have their employees returning to the office, and we are seeing that sporting event attendance is back on. It’s no wonder that there has been an influx of excitement surrounding Toronto condos these days.
Landlords are also very happy that their investments are getting fair market rents again. We see many condo and loft investors looking to capitalize on real estate purchases. Although there have been many stages of uncertainty over the last two years, our real estate market has done exceedingly well. 2022 is looking like another great year to buy a condo in Toronto.
Pandemic Recap
Ever since the beginning of the pandemic, there have been question marks about Toronto real estate. Early in the pandemic, we saw houses coming to a freeze/standstill. Few to no sales were happening. Agents weren’t leaving our homes during the lockdown.
We were advised to only show a house or list a home for sale only if our clients had a “necessity” to buy or sell. Then as the market began to move in the late summer of 2020, we saw prices of condos falling. It was nearly impossible to get showings on our condo listings in the Fall. When we did get an offer, we had to negotiate very hard to minimize any losses for our sellers. What shocked all Toronto real estate agents and economists was that the condo market rebounded within six months! Ever since early 2021, we have seen condo sale prices skyrocket. It’s been a steady up-ticket ever since.
➤ Every good investment needs a well-planned strategy. Start preparing with:
- Are Condos A Good Investment?
- Condo vs House Investment
- 5 Tips for Selling Your Condo in Toronto
- Frequently Asked Questions when Selling a Condo in Toronto
Future Of Toronto Condos
Some may be wondering if what our condo market has done over the years is sustainable. We know that Toronto has a great deal of resilience (the above is one example.) Toronto has a diverse economy, offering more industry pillars than any other province in Canada. There are several factors to consider when purchasing a condo in Toronto, and we detail these below.
Interest Rates
Some are concerned about the Bank of Canada interest rate hikes. Yes, this is a consideration to be aware of. After all, it’s critical to understand your carrying costs, whether you are an investor or principal owner. What’s being overlooked is that interest rates have been at the lowest rate in the history of North America.
This was never going to last. Even after multiple interest rate hikes, Canadian Banks will still be offering some of the lowest mortgage rates in our history. It’s essential to keep a perspective here. All buyers and sellers will settle into the new reality. As mentioned above, we are resilient. We always find a way. The market always finds a way. Don’t believe us? Have a look at the historical interest markers in Canada. Imagine that you purchased a home in the 1980s for $75,000 with an interest rate of 21%. Many did. Those who bought back then are very happy with their investments today.
Immigration
Ontario grows by about 350,000 people a year. That has slowed in the last two years due to the pandemic. But, the gates are opening up again. Canada is planning on adding millions in the next ten years. Most immigrants end up settling in major Canadian cities. Toronto and the Greater Toronto Area are major destinations due to the many financial opportunities and housing options. There are very few rental apartments coming to the market, so the primary option is to rent a condo from a landlord or, for those who can afford it, to purchase their own property.
We Need More Condos
Despite what you may read in the news, Toronto needs more housing. That housing option is going to be condos. We won’t see many affordable housing rental apartments being built in Toronto (it’s a long story but the short of it is that the three government levels are not making the policy nor financial incentives for developers to shift their focus away from condo developments.) Immigration and inter-country moves to Toronto continue to push the demand for housing higher and higher. Also, the increase in Tornoto’s average income further benefits those who can afford a downpayment.
Buy & Hold
Every wealthy person we know owns more than one piece of real estate. The richest of whom own multiple properties. The basic rule (after you purchase based on solid investment fundamentals) is to hold the property and refinance it when appropriate to support further investments down the road. Let the condo investment work for you. Note that to run this real estate investment as a business, you need to view it as a business and run it like a business. Considering what makes the condo unique and how to structure deals is critical. Also, when owning a condo for many years to come, you must take good care of your investments. Do the necessary upgrades. Choose your tenants wisely.
Hold. Hold. Hold. It’s key to real estate wealth. If you plan on moving and want to purchase a different property, it’s an excellent idea to call us to discuss how you can retain ownership of the condo. Like we said, buy and hold. There will be massive growth in Toronto condo values in the decades to come.
Key Takeaway
We believe that buying a condo in 2022 is a great move. We are even bigger believers in purchasing a condo for years to come. Toronto has always been 19 years behind New York City’s condo values. Take a look at what condos in NYC sell for. It’s aspirational. You, too, can be at that level. It’s a matter of getting into the condo market today and ensuring that you purchase the right condo.
