Investors fuel Toronto real estate to new record-high prices

An old house in Scarborough listed for $ 3 million sums up this market pretty well: it’s not for people who want to live here

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Toronto property prices broke the cap again in November as investors buy up property and continue to inflate the market.

Average sales price reached $ 1,163,323, according to the Toronto Regional Real Estate Board (TRREB), up 21.2 percent from that time last year.

TRREB also notes that supply has declined, with new listings falling 13.2 percent year over year. Single-family homes in the 416 averaged $ 1,807,983. Semi-detached houses cost up to $ 1,431,988. The Toronto townhouse average hits nearly the seven-digit district at $ 981,759. While all of those condos in the sky don’t do much to bring prices down. They averaged $ 745,951.

In this market, many sellers don’t even bother to attract people who actually want to live in this city. Instead, they are looking for investors. It is not uncommon for single family homes to be sold at ungodly prices as investors are expected to be rushed to capitalize on rising prices and demand.

Take, for example, the nearly $ 3 million listing for an old three bedroom Scarborough house in 752 Midland. The listing does not include images as the sellers expect investors and developers to be attracted to the large plot of land that could potentially house new townhouses or a medium-sized apartment. You leave it to the buyers to check whether this is even possible.

Most potential investment property owners flock to the relatively more affordable condominium market. You can easily find brokers alerting you to pre-build condominium sales, promising similar price growth that we’ve seen in the past five years, simply making even more people overpriced.

Last month, Bank of Canada Deputy Governor Paul Beaudry said investors are using their equity to buy investment property, relying on already sky-high property prices in Toronto to escalate when immigration resumes.

But investors are driving prices up by competing with first-time buyers for limited supply. According to Teranet’s market insight report, a quarter of people who bought homes between January and August were multiple property owners.

Earlier this year, economists at RBC and BMO Warning made proposals that would deter some investment property buyers that would fuel a housing bubble. Their proposals included doubling the minimum deposit requirement for investment properties and increasing capital gains tax for investors and speculators. Real estate representatives, however, continue to reject proposals that could harm commissions.

“For far too long, governments have focused on short-term band-aid policies to artificially suppress demand,” said TRREB President Kevin Crigger in a statement that is likely to call for less bureaucracy and more action to build more homes.

“Governments at all levels must take coordinated action to increase supply immediately, to address today’s supply challenges and work towards meeting growing demand in the future.”

@justsayrad

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Radheyan Simonpillai

Radheyan’s first assignment for NOW was to review the Ice Cube heist comedy First Sunday. That was in January 2008. Born in Sri Lanka and raised in Scarborough, Rad currently lives in Leslieville with his wife and two adorable children.