Toronto Income Property Newsletter – Summer 2021

Quick note from Paul:

Hey everyone. You may have noticed that our monthly newsletters have not been published as frequently as they have been in the past. We have decided after all these years to go to a new quarterly format, with fresh content and statistics coming out to reflect the summer, fall, winter, and spring markets.

Has the Toronto real estate market really started to slow down? It is no secret that the local housing market fared very well throughout the Covid pandemic. While other industries have been devastated over this past year, Toronto houses in the GTA continued to sell at a steady pace and for record high prices. Low interest rates have kept the demand high and the overall market strong. Some experts think that Canadian real estate in general is over-valued, while others believe that our market still has more room to grow. I have always felt that the feverish demand is tied to these low interest rates, and nothing will really break until they start to go up again. Yet, over the past couple of weeks I have been hearing stories that things are in fact slowing up a touch. I have not seen this yet directly, but remember we are in the heat of summer, and everyone is finally able to come out and enjoy themselves, many for the first time in quite some time.

While single family homes have been in high demand, residential income properties are now becoming a little more sensitive to the bottom line and cap rates of 4+ are starting to make a comeback. I will look first six months of income property sales in Toronto from 2021 to assess how well the Toronto multiplex market has been doing and where it is likely to be heading for the duration of this year.

If you have ever thought about acquiring an investment property in Toronto, now might be the perfect time to act. With the market potentially transforming back to where net income determines pricing, this shift may present desirable buying opportunities. Plex Realty is always on the forefront of the income property market in Toronto, and we are here to help you in any way at any time. Profit from our years of experience in this segment of the market.

We currently have a couple of investment property opportunities that are coming up. Keep an eye on our listing page for more details.

The first is a luxury triplex in midtown fully leased and in impeccable condition with A+ tenants. The gross rent is over $6500 per month and based on the desired price would cap out at around 3.5.

The second property which will be coming to the market this week is an excellent example of creative urban infill. What was once a small, single-family Victorian is now a fully re-developed property offering 3 separate structures. Architect-designed and custom-built, this ultra-modern and hyper-efficient multi-unit dwelling is fully permitted, zoning compliant, legal, and separately metered for both gas and hydro. Each of its three pristine units is completely separate with its own private outdoor space. Please contact evan@plex.ca for full listing details.

– P.A.


Toronto Prepares to Tax Vacant Homes Next Year

In an effort to address the housing shortage in Toronto, mayor John Tory announced that the city will be moving forward with the proposed 1% tax on vacant homes beginning at the start of next year.

He stated “The goal of the tax is to change the behaviours of vacant homeowners, encouraging them to sell or rent out the homes, thereby increasing the housing supply. A similar tax currently exists in Vancouver and has been touted as a success.

The initial plan is that homeowners would self-declare the residential status of their homes and any property left empty for more than six months would be subject to the tax. There will be exemptions for properties undergoing major renovations or waiting on probate.


2021 YTD Income Property Sales

As we hit the midway point of 2021, it is interesting to look back and see how the Toronto residential income property market has fared over the past six months. Here is sales data for four key areas of Toronto, based on sales of properties with three or more kitchens.

C01 – Downtown Toronto

# of sales: 37

Average Sale Price: 2,160,345

Average Days on Market: 20

C03, C04. C10 – Midtown Toronto

# of sales: 25

Average Sale Price: 2,535,748

Average Days on Market:31

E01, E03 – East Side (Riverdale, Leslieville & Danforth)

# of sales:16

Average Sale Price: 1,715,375

Averaqe Days on Market: 32

W01, W02 – West Side (High Park, Bloor West Village)

# of sales: 48

Average Sale Price: 1,780,320

Average Days on Market: 29

If we take the average sale price in all these areas, we get an overall average sale price of $2,047,947. Can you imagine that to buy an investment property in Toronto, people in many cases are paying over two million dollars? This is almost double the average for single family homes and is certainly a big increase form even just three years ago. The continued certainly of this market will be how well the net rents perform relative to these high prices that are being paid.


A Look at Hamilton Area Real Estate – An Investment Property Focus

This article is courtesy of Evan Wright, Plex Realty Sales Representative

Is the Hamilton real estate market still worthy of consideration?

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