Real Estate Market in Canada's Beautiful Toronto, Ontario

For those looking to immerse themselves in the business and the bustle of the world’s most natural resource-rich country on earth need not look any farther than Toronto. To say that Toronto is the focal point of Canada is to state the obvious, much to the chagrin of residents of both Montreal and Vancouver.


If you are serious about getting things done and being where the action in, Toronto is the place to be, and it is this exact attitude that has carried the Toronto housing market in recent years. While the boom in housing here isn’t quite on par with other Canadian booms in Calgary, Edmonton and Vancouver, Toronto has been holding its own with investors over the last ten years, but as is the case with investing, it is the future that everyone wants to know about.


According to recent reports, however, the city of Toronto is in good economic hands well into the future. In a press release by CIBC, one of Canada’s largest banks, projections of Toronto’s real estate future are rosy, even two decades from now, but the driving force behind this sustained real estate growth isn’t wealthy investors or Canadians picking up stakes and moving to the big city, but immigrants.


Benjamin Tal, a senior economist for CIBC, predicts that thanks to recent legislation that eases immigration to a country that had been losing population in recent decades, the influx of people looking to buy homes will be rising into the foreseeable future. This, of course, is music to the ears of any potential investors who are looking at either small time investing through home-flipping or wealthy investors who might want to take an old apartment complex and turn it into revenue generating condos. Even if you are looking to build fresh, according to Tal, the market will be there to support you.

Looking at the history of Toronto’s housing market, the years 1986-1990 were truly a golden age as the average home price jumped from just over $100,000 to $275,000 in just four years time. Since then, a “smile” has formed, with an initial drop during the early 1990’s, followed by a slow and steady climb back up ever since. The recent rise in housing prices, which started around 1996, has been much more gradual then the sharp rise of the late 1980’s.


For years, optimists in the Toronto housing markets have argued that thanks to this more gradual rise in prices, combined with increased population in the greater Toronto area and the recent influx of immigrants, that it is wrong to call the current Toronto housing situation a “bubble,” but it is more of a permanent rise that has occurred.


More credence is given to this theory when you compare the rise in housing prices with the growth of Canada’s gross domestic product over the same time period. While the 1986 housing price leap seriously out-gained the GDP of the time, the ensuing “burst” of that bubble corrected things. But the current rise since 1996 has been almost in lockstep with the healthy Canadian GDP.


While it is impossible to point to this one statistic as a “smoking gun,” most investors don’t need any further proof that the housing market in Toronto is stable, healthy and ready to grow further thanks to the growing roll of Toronto as a world city and as the financial centre for a country that is becoming more and more relevant on the world stage every year thanks to an almost inextinguishable supply of natural resources that will make Canada the place to be for investors for decades to come.


Happy Investing!

Mary Wozny