Toronto obviously is one of the major markets for real estate in North America. Many people want to live here, not to mention, the growing number of Toronto real estate market investors.
So what can home sellers, homebuyers, and real estate investors and developers expect to happen in the Toronto real estate market in 2019?
It’s a Seller’s Market
If you’re planning to sell your home in Toronto, there are lots of good news. Sales are consistently strong and this tends to increase on the whole. In September of 2018 the sales numbered 6,455 sales. In October, this rose to 7,492 transactions.
What this means is that home sellers can expect their homes to have buyers ready to buy the home from them. In fact, homes are selling faster. In October, the days on market for houses for sales went down by two days, and now it only takes an average of 24 days for a Toronto home to be bought off the market.
Prices Continue to Go Up
You’d think that this interest for buyers is due to the decreasing prices of homes to make them more attractive investments. But the fact is that prices continue to rise. Experts predict that the median price for homes in Toronto will still increase in 2019 with a forecast of a median price of $854,552.
Granted, that’s not quite as expensive as the median prices in Greater Vancouver, with predicted median prices of $1,291,144 in 2019. But it’s more than double the median prices in Montreal, where the median price of homes is expected to get up to $421, 306.
Rentals are also going to increase next year, though that’s to be expected. In 2018, the rent price for a 1-bedroom condo unit went up to $2,163 and that’s a 9.5% increase from last year’s rental prices. For 2-bedroom units, the price increase was 8.3% as the average rental price is now $2,822.
The Demand Will Still be Strong Due to Tech Sector
So what’s fueling the demand? Some say that it’s due to the empty nesters who are downsizing their large homes and then moving to smaller homes and condo units.
Others say that the demand is due to the booming tech market in Toronto. Tech workers are generally paid much higher wages on average, and so they’re more likely to afford the price of homes in Toronto.
The tech boom in the city isn’t a recent development, as the area has added about 82,000 new tech jobs from 20121 to 2017. That’s more new jobs than what was available in Silicon Valley and the vast majority of cities in North America. Toronto is ranked #4 among the most important tech hubs in North America, and that’s a jump from its 12th-place ranking last year.
Tech isn’t about to slow down in Toronto either. Microsoft just recently announced plans for putting up a new Canadian HQ in the core of Toronto, while Intel also publicized plans for a graphics chip engineering plant in the city.
Then one piece of good news for buyers is that at least the growth rate of prices for Toronto homes is going down. The experts predict that the prices of homes in Toronto will only go up by 1.3% next year, and that’s close enough to the national growth rate prediction of 1.2%. In contrast, Montreal homes are expected to fetch prices that are 3% higher in 2019.
Part of the slowing growth is due to rising interest rates, as well as the new taxes on foreign investors. That has diverted the focus of Chinese investors to other areas such as Montreal, where home prices are also much more affordable.