Investors Dominating Toronto Condo Market

Toronto Condo Market Dominated by InvestorsWith Toronto’s condo market among the hottest in the world right now — almost 68,000 new units are now in the planning stages or under construction across the GTA — investors are cashing in big time on what looks like a sure bet compared to battered stock markets.

Some 45 to 60 per cent of all new condos planned for the GTA are being snapped up by investors, says market research group Urbanation. That number is believed to be closer to 80 per cent in the downtown core where 12 new highrises, with 5,707 new units, are creeping floor by floor into the Toronto skyline right now. Click here to view the full article.

 

The demand for rental accomodation in Toronto has been growing strongly, and vacancy rates remain very low despite the fact that renters are buying homes in record numbers because of all-time low interest rates. The increasing rental demand has been met primarily by investor-owned condominium apartments, as there is little incentive to invest in dedicated rental buildings (at least in part because of rent controls). As long as the economy remains strong and attracts workers who need rental accommodation to Toronto, the condo market will continue to do well. However, if the economy weakens (as many are predicting), rental demand will likely fall off, and investors could very quickly lose interest in new condos. This could result in a correction in the Toronto condo market: the canary in the real estate market coal mine.