Recently, I read two articles that reveal something about the current real estate market in the GTA: It’s a good time to invest.
The Star published an article this morning about Toronto’s house prices and how they’re expected to cool in the fall and winter, leading to more moderate price increases in the spring of 2012. Toronto market analyst, Shaun Hildebrand, says, ” We’re seeing sales levels start to moderate, we’re seeing new listings start to catch up to demand, and that’s going to create more balanced market conditions. Prices won’t be growing as quickly as they were.”
The article’s final note is perhaps the most interesting, though. Writer Susan Pigg comments on CMHC’s forecast, saying, “But affordability is becoming such a concern, especially in overheated markets like Toronto, that CMHC predicts higher demand for rental apartments and condos by first-time buyers who have now found themselves priced out of the market.”
A second article, found in The Globe and Mail, Renting without being fiscally insane, reveals yet another detail that investors might find interesting. The article starts off like this: “I’m in an apartment-rental nightmare, and it’s called Toronto.” Writer Emily Jackson is not complaining about a shortage of rental space in Toronto, but about the price and size of the units available. Although financial advisors said that she should not spend more than 35% of her monthly income on rent, after looking at the offerings on TREB, Jackson doesn’t think she’ll be able to follow this rule of thumb.
Leslie Scorgie, author of Rich by Thirty: A Young Adult’s Guide to Financial Success, says, “Although rental rates can be excessive, it can be more financially prudent to rent than to buy. The short-term pain of renting is a wise option for a person without a long-term contract or a full-time job.”
What this means for those who do have a full-time job and an income that allows it, is that there will be plenty of opportunity for investors to provide those rental spaces at cooled prices. Rentals are in high demand and the market is cooling – and this is great news for investors.