Toronto Income Property Newsletter April 2017

In order to fully understand what has been going on with Toronto real estate, it is important to identify some of these sales that have been going through the roof.

Take a look at the following link:
Income property (3+ kitchens) sales from the first quarter of 2017

There have been some very high and unprecedented sales of both single family and income properties in the Toronto real estate market over the past few weeks. Some of these prices seem to defy logic as the investment value has all but disappeared. It seems like this huge demand is fueled by buyers looking to get into the market no matter what the cost.

When we see a small triplex at Coxwell at Danforth trade for $1.3M (almost half million dollars over the asking price), we are in new territory. As an agent representing investors, it is very hard to make sense of this. Unless you put down a very sizable deposit, you will need to put money in every month to break even. This is the flipside of investing. These properties that are trading for several hundred thousand dollars over the asking price are indicative of a market that is out of control and needs to cool off.

Whilst there is a huge push for buyers to try and get into the Toronto real estate market, apparently there are over 65000 unoccupied homes in the GTA. The city is currently eyeing a tax that would supposedly curb speculative buyers from purchasing real estate in Toronto and then not occupying it. The notion is that these vacant properties should be sold if not then be made available to renters. There is quite a bit of speculation as to whether this measure would actually be effective. Many believe that it doesn’t make sense for investors to leave their properties empty, despite the fact that we have been experiencing a rental shortage.

An empty homes tax introduced in Vancouver this year charges 1 per cent or $10,000 on a $1 million property that isn’t occupied by the owner or family or, rented to a tenant, at least six months of the year. Vancouver also launched a 15 per cent foreign buyers tax last year, which has been talked about here in Toronto for several months. It seems like all levels of government are looking at Toronto and trying to figure out how to stem the tide of this hot market.