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Are Toronto Condos Still A Good Investment?

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. 




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. 


Are you thinking about investing in a Toronto condo? As trusted local Realtors®, we can help you! Get in touch.
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