At GTA Selling, we help buyers with all kinds of real estate goals. Today, one of the most common questions we get is whether or not condos in Toronto still make a good investment. 

The truth is - no two buyers are identical and determining which investment paths are most successful requires a myriad of considerations. Depending on your unique motivations, goals, and wants, buying a Toronto condo could be a wise and profitable investment. 

Let’s take a closer look at today's market and some things you need to consider if you’re curious about buying a condo. 

Considering a Toronto condo purchase? You’ll want to work with an experienced local Realtor®. Learn more about how to find the best real estate professional to work with here. 

Market History

Just a few years ago real estate across the Greater Toronto Area was defined by a fast-moving and competitive seller’s market. At the beginning of the COVID-19 pandemic, interest rates were drastically lowered by the Bank of Canada in order to reduce the chances of entering a  recession. These low-percentage interest rates made home financing extremely affordable and caused Toronto’s housing market to become busy with buyer activity. 

During this lending heyday, condos became particularly valuable commodities. For landlords, the condo market was an opportunity to expand their portfolios and secure a high-demand investment property with a low bottom line. For end users, affordable lending meant having the chance to begin a journey of home ownership and find refuge away from the rental market. 

Since then, the Bank’s target interest rate has grown from 0.25% to 3.25% - making it more challenging for some buyers to acquire loan approval. This has caused Toronto’s condo market to slow down noticeably, causing potential buyers to wonder how this change could impact their investment. 

With rising interest rates greatly impacting buyer financing in today’s market, it’s important to understand your mortgage inside and out. Have a look at these blog posts to learn more. 

• What’s the Normal Term of a Mortgage in the Toronto Area?

• A Guide to Mortgages if You’re Self Employed

• When is a Good Time to Refinance?

As A Resident 

As a homeowner, your property is often the largest investment asset you’ll have in your lifetime. This is one of the primary advantages homeownership has over renting. 

With higher interest rates disqualifying many residents from the prospect of home buying, an elevated demand for rental properties has made the cost of renting in Toronto exceedingly expensive. In fact, many market analysts and real estate experts have declared Toronto a “landlord’s market”.

If you’re currently renting and have the financial means to consider condo ownership, it makes sense to buy. Rental costs in Toronto are unlikely to drop anytime soon. Rather than simply giving your money to your landlord, condo ownership allows you to build long-term equity that you can tap into in the future. 

Exiting the rental market and investing in a Toronto condo makes sense now more than ever. As most Toronto condos come at a lower price point than houses, they’re a strong option for entering the cycle of home ownership. 

As A Landlord

Today, the cost to rent in Toronto is reaching record-breaking heights. As a landlord, buying a Toronto condo in 2022 means earning higher volumes of passive income than ever. As a global city boasting a high standard of living, Toronto is growing at an exponential rate. As the city expands, the demand for local rental housing will undoubtedly remain high for the foreseeable future. With these factors in mind, buying a Toronto condo as a landlord can be a profitable and relatively low-risk investment.  

Remember - even if you intend to buy property exclusively for investment purposes, you must consider how the property suits you. As a landlord, you will have distinct duties and responsibilities. Selecting a property without considering how effectively you can manage it can cause difficulties. Your Realtor® can address your situation and help you find a suitable property that matches your needs. 

What About Pre-Construction Condos?

If you’re serious about buying a pre-construction condo, you’ll want to work with a well-connected expert Realtor®. Click here to learn more. 

From an investment standpoint, buying a pre-construction condo offers unique advantages over existing properties. 

For instance, buying at an earlier access level can help optimize your margins as the property value is likely to go up before you even move in. In addition, many pre-construction developments feature modern on-site amenities and are located in trendy, high-demand areas. As a landlord, these factors can offer you the opportunity to charge premium rental rates on your unit. 

Unfortunately, many pre-construction condo developments are experiencing new challenges following the pandemic. Labour shortages, supply chain delays, and ongoing inflation are introducing potential complications to a few of Toronto’s large pre-construction projects. Thankfully, pre-construction buyers are generally well protected in the case of delays or other issues. If you have specific concerns or reservations about buying pre-construction, ask your Realtor®. They can help you determine if the path is right for you based on your wants and goals. 

We love this lofty 2-storey penthouse! It’s a showstopper with views of the city, the water and the CN tower. This Mystic Pointe stunner is showcased in the building formally known as The Warehouse of McGuinness Distillers and offers 3 bedrooms, a sitting room and 3 balconies. Huge energy-efficient windows allow for natural sunlight to flow throughout 1785 square feet of carefully crafted living space. Great space. Fabulous amenities. Perfect location. 

Listed by: RIGHT AT HOME REALTY, BROKERAGE

To book a showing or get more details, reach out! 

Contact: Nancy Pierce - 416 985 1486

Our Property Crush Pick…

We cannot say enough about this private, electronically gated beachfront property. Begin your day with glorious views of The Blue Mountains over Georgian Bay. End your day around the fire pit with family and guests.

Throughout the summer days enjoy the beach, your very own saltwater pool, and various outdoor activities Simcoe County has to offer. Swim, hike, bike, golf or take in a drive-in movie in Midland. Experience the natural beauty of Georgian Bay as the seasons change with stunning fall colours and frosty winter scenes. Hit the slopes at Blue Mountain or ski on cross-country trails or snowshoe in the forest. The options are endless!

The home, itself, offers approximately 5800 square feet of luxury living space. Your fussiest
client will appreciate the attention to detail including the security, audio, lighting and home
management systems integrated with control 4. There are 3 plus 2 bedrooms, 4 bathrooms, 3
fireplaces, vaulted ceilings, chef’s kitchen and recreation room with a full entertaining wet bar.

Want to see more stunning homes? Check out our other recent Property Crushes here. 

As long-time beachfront property owners in Simcoe County, we know the area and have helped
clients buy and sell properties along Wasaga Beach, Collingwood waterfront, Oro-Medonte farm
country and Nottawasaga. We are here to help you find your dream home.

Please call Nancy at 416-985-1486 for more information or to book your private tour of this fantastic
property.

1728 Tiny Beaches Rd S - Simcoe County

$4,950,000 

Listed by: Forest Hill Real Estate Inc. 

Located just north of the GTA, Simcoe County is one of Ontario’s most scenic outdoor destinations. With countless kilometres of shoreline between both Lake Simcoe and Georgian Bay, year-round outdoor amenities, and the world’s largest freshwater beach, there are not many better places to buy a cottage than Simcoe County. 

If you’re interested in purchasing a cottage, buying during the fall season can help you be successful. As sellers look to offload their property before winter, buyers have a greater chance of finding a deal. Plus, as the market slows down, buying a cottage during the off-season can make the process feel more relaxed. 

If you enter the market this fall there are certain variables you’ll need to navigate as rising interest rates and other factors are sure to impact real estate in the coming months. Here’s everything you need to know about buying a cottage in Simcoe County this fall. 

Want to learn more about the historic and beautiful Simcoe County? Read our local guide to discover everything we love about the area. 

The Summer Market is Closing

The most popular time to buy a cottage property is often the summer months. As buyers dream about spending days at the lake before the fall, cottages can sell for top dollar during peak season. However, more often than not, there are several beautiful unsold properties still left on the market come September. This is particularly the case in 2022, as higher interest rates have cooled off the market. 

As the summer market closes, sellers may feel like their best opportunity to sell for a high price has passed. As a result, they’ll be even more motivated to negotiate with buyers. While the listing price may remain unchanged, it doesn’t hurt to make a low offer and see what happens. The more prime local properties that don’t move over the summer, the more likely sellers are to be flexible. 

With rising interest rates acquiring a loan for a vacation property may require special considerations. Learn more about the many options for mortgages on our blog. 

• What’s the Normal Term of a Mortgage in the Toronto Area?

• A Guide to Mortgages if You’re Self Employed

• When is a Good Time to Refinance?

Don’t Stress the Season

Rather than purchasing a cottage and rushing to use it as much as possible before winter, buying in the fall gives you time to plan for the next season. You’ll be able to enjoy the anticipation and have time to nicely set up and prepare the property for spring. If there’s work that needs to be done or upgrades you wish to make, hiring local contractors can be faster and more affordable in the off-season. 

Market Uncertainties

Since the beginning of the year, rising interest rates have caused real estate to become more balanced. In these new market conditions, both buyers and sellers are taking a hit. Right now there is buyer uncertainty in the GTA and across Ontario. While property prices aren’t currently going up, new interest rates are still making things more expensive overall. 

As it’s been a long time since the GTA has seen these types of conditions, it is hard to predict where the market will head next. Interest rates could again increase, prices may go back up, or both. If you want to buy a cottage, the best way to avoid the risk of future market pitfalls is to begin the buying process today. 

Just like cottages, traditional real estate can also see seasonal shifts. Read these helpful blog posts before you navigate the market. 

• Buying in Toronto: Will it Get Less Expensive This Year?

• Essential Analytics | August 2022

• Navigating Design Trends in the Real Estate Market

Working With an Area Specialist

Just like a home, buying a cottage requires navigating a myriad of market variables. The best way to find a property that suits you is by working with a Realtor® who specializes in the area. Although it’s just 1.5 hours away from Toronto, real estate in Simcoe County is unique. Not only will an experienced Realtor® help you locate and assess cottages that match your specifications,  but their local market expertise can help you determine which properties are priced well and which ones don’t offer the best value.