Toronto Loft Conversions

Toronto Loft Conversions

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Modern Toronto Lofts

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Unique Toronto Homes

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Condos in Toronto

Condos in Toronto

I started off selling mainly condos, helping first time buyers get a foothold in the Toronto real estate market. Now working with investors and helping empty nesters find that perfect luxury suite.

Toronto Real Estate

Toronto Real Estate

For all of your Toronto real estate needs, contact Laurin. I am dedicated to helping you find that perfect and unique new home to call your own.


Tag Archives: prime real estate

Prices, demand squeezing buyers out of desirable GTA neighbourhoods Staff

A new RBC report finds that buyers are being “priced out” of prime GTA real estate due to increasing prices and a lack of single-family homes in desirable neighbourhoods.

Comment: What else is new? While you can still find houses in Toronto for $300-400,000, it is the prime neighbourhoods that are running $800,000-$1 million. How anyone can afford that is beyond me…

The report, co-published by Pembina Institute, suggests that while there is no shortage of properties in the GTA to construct single-family homes, much of the land is located outside the City of Toronto and away from high-demand centres of employment.

Comment: Which is why condos are built in Toronto and housing developments in Ajax and Brampton.

The report notes that the demand for detached and semi-detached single-family homes in desirable GTA neighbourhoods has exceeded supply and caused home prices to go up.

Comment: Has been that way since 2007 or so, maybe even earlier. That is why 15 people bid on every good house in the better neighbourhoods.

This imbalance means that many buyers are unable to afford homes in the GTA and are essentially “priced out” of the market.

According to recent housing figures by the Toronto Real Estate Board (TREB), the average cost of a GTA home increased by more than $37,000 over the past year, with the total average price coming in at $539,058.

Comment: And that is the average! Condos and towns and detached homes all together. Heck, detached homes are $855,000 now, on average. Which means fully half of sales were ABOVE that number. Ouch.

The lack of affordable housing options has led many residents to purchase cheaper condominiums and high-rise apartments within the city or move into larger, single-family homes in the suburbs.

Comment: And there you have one of the main drivers behind the Toronto condo market.

TREB notes that condominium sales in October increased by nearly 25% compared to figures from last year, while the sale of semi-detached homes only increased by 7.8%.

Robert Hogue, senior economist at RBC, said the disparity in the housing market has shifted the focus of many buyers.

“Comparatively speaking, condo ownership exerts less financial stress on homebuyers, which partly explains the strong buyer interest in condos in the past several years. Owning a single-family home at today’s prices is a stretch for many homebuyers in Toronto and desirable suburban locations,” Hogue said in a statement released Monday.

Comment: A house costing $855,000 would require a household income of $165,000 as a bare minimum. That does not include property taxes, utilities, etc. You would probably barely scrape by with a $200,000 income and 10% down. Just to put that in perspective…

Shift to convenience over commuting

An RBC-Pembina report released in 2012 found that 80% of GTA residents would give up a large home and yard in order to live in a “location-efficient” neighbourhood that is transit-friendly and offers a shorter commute.

Nearly 70% of residents said they chose to live in their current residence because of affordability rather than preference.

Comment: I did the math recently. For me to move up, to go from a 3-bedroom house to a 4-bedroom house, would cost me around $100,000 out of pocket in down payment, commissions and legal fees. So basically all of my equity in this house goes toward that bill, leaving me with a larger house, no equity and a mortgage payment double what I pay now. No thanks!

“Many homebuyers are faced with a choice between a condo in a walkable and transit-accessible neighbourhood, or a single-family home located in car-dependent location,” said Cherise Burda, Ontario policy director at the Pembina Institute.

The GTA’s growing population, which is expected to increase by 44% over the next 25 years, is cited as a major reason why the demand for single-family homes is so great.

Comment: Sure, all the condo dwellers want to move up at some point. Couples have children and want a house, or a better school district. You name it, there are all sorts of reasons houses are in such high demand.

The report also points to a steady decrease in mortgage rates in Canada over the past 30 years, from 18.5% in 1981 to 4.25% in 2012.

The report finds that lending rules have also become less restrictive for potential buyers, making home ownership more attainable and driving up both demand and prices.

Higher family incomes, a growing economy and rising development costs were also cited as possible factors contributing to the high cost of homes in the GTA.

Contact Laurin Jeffrey for more information – 416-388-1960

Laurin Jeffrey is a Toronto Realtor with Century 21 Regal Realty. He did not
write these articles, he just reproduces them here for people who are
interested in Toronto real estate. He does not work for any builders.