Real Estate in Newmarket, Ontario-Buy a Home or Condo in TorontoPosted by: Quetan Santoer | Posted on: September 2, 2019
Every week for years now I have talked with numerous buyers and sellers. Most understand the market and that it generally goes up, but there are always a few naysayers. From them I consistently hear these words…. we are in a bubble, or I am going to wait until the price drops, when do you think the market will break so I can get in at a lower price?
When I first started in this business the average price in Toronto was in the $60,000 range. Yes, that does date me doesn’t it? Oh well. Today the average Toronto home price is $485,000.00. Eight times higher than when I started. This confirms for me what I always say about City of Toronto Real Estate. It at least doubles every 8-10 years, actually more than doubles since I am no where near 80 yet. Keeping those numbers in mind, I thought you might find these statistics below with regards to Luxury Condo costs around the world rather interesting. This information was found in the Financial Times of London and it is the cost per square foot.
London PPSF $5440.00
New York City PPAF $4480.00
Hong Kong PPSF $4400.00
Los Angeles PPSF $3360.00
Sydney PPSF $1600.00
Toronto PPSF $1200.00 – $1500.00 at the Four Seasons
Mumbai PPSF $1200.00
Shanghai PPSF $1100.00
The next time you get to thinking that we are in a blip, a bubble, or the market is about to crash, give those numbers some thought. The market does cycle and it can drop substantial, like back in 2009 when it cycled down for roughly 6 months and created a great buying opportunity for savvy buyers with a 15% drop in values. It regained that 15% and added 4% more in 2010. Toronto does this consistently. What I am saying is, it recovers and keeps on moving up.
For years now I have seen many of the naysayers literally get locked out of the marketplace and many of them for good, others ending up buying in areas that they really didn’t intend to live in such as Newmarket or Bradford. It is my humble opinion that you cannot lose money if you use your noodle and invest wisely in Toronto Real Estate. Remember that when it comes time to sell, your home is your biggest tax free investment in Canada. In fact, it is the only truly tax free investment you have at this point in time. When you choose to retire and take money from your RRSP it will be taxed at the top tax rate as your tax deductible expenses will have dropped. Therefore you should make it a point to own either the biggest home you can comfortably afford or a home in the most expensive neighbourhood or condo building that you can comfortably afford. The better the neighbourhood the more it will go up. A 5% increase on a $500,000 home is $25,000.00 but the same 5% on a million $$ home is $50,000. And we do tend to increase 5-6% per year on average.
Let’s take right now, for instance, the end of June. All of a sudden things are starting to slow in some neighbourhoods… not all mind you. It is a combination of two things. One is we are moving into the summer slump. Folks aren’t viewing homes or Open houses on the weekend because they are out of town at the cottage or on their holidays. In the summer to Toronto comes a Laissez-faire attitude to things in general. Why not! We all need a break and so much of our year is cold. We’ve got to enjoy that nice weather when we can. However CMHC did predict in the early part of the year that the housing market would start to slow in the second half of the year. So it is possible that this factor is kicking in as well. The truth is we won’t know until about 90 days out.