I have a tonne of people ask me what is going on with the market? Is it maintainable? What will my house be worth in four years? Is now the best time to sell?
I have the honest answer right here:
NOBODY KNOWS.
I wish it was not true. I wish I had the answer. I have looked everywhere!
Let’s start with the leader of my company, Gary Keller. At the main Keller Williams event in February in his main address, he literally threw his hands in the air and said for the third year in a row that the Canadian market simply defies reason. This is talking about the Canadian market on a whole, not the hottest markets, Vancouver and Toronto. These markets would be on the leading edge of the insanity!
Then there are the Major banks, who cannot agree on anything. One of the big five banks will state that this is the year that everything comes crashing down, while the other talks about how we can expect double digit increases!
Then we get to mortgage brokers. What I like about these guys is that they are having the actual conversations between the lenders and consumers, and have skin in the game, (commission), so they are always looking at how to make it work. The trouble with Mortgage brokers, however, is that like agents, the usually have a specific type of clientele, and their views of the market are skewed to those types of clients. So not too much help here! So as you can see, there is truly no concrete data out there that is at all dependable.
So why don’t we talk about the main two arguments?
“this market is not sustainable”
Let us call this what it is: TRUE!
We enjoyed a %10.6 increase year over year for may this year. The same report cited that the average price for a detached home in the 416 area code reached a whopping $1,285,693. Extrapolated over the next decade, that same home enjoying %10.6 per year would be worth 3.521M in 2026. That would be the AVERAGE detached! Maintainable? I think not.
“if you look at Tokyo, New York, London, San Francisco, we are still WAY undervalued!”
OK, this makes sense, but are WE comparable to these cities? I love Toronto. I love it. But are we competing on this level? For me, I feel like I am a little too emotionally invested to call this one, but I like the argument, and at the moment, when you look at what is going on in the market, It is winning.
So why would you read this article? I have told you nothing except that I know nothing… Here is my conundrum, I am not just a real estate agent, I am a real estate investor as well. So truly, I can just tell you what all the other people above have told you, which is their opinion.
So here is mine: I continue to invest in the Toronto real estate.
There are a few reasons for this. I live here. I have always liked real estate because you can touch it, and I like to go do that from time to time. I know it. I obviously know this market like the back of my hand, and I spot nuances and opportunities that most would not. While I am not sure that we are exactly on par with NYC, Tokyo, or San Fran, we are pretty awesome! I do believe that there is a delta between where we are at pricing wise and they are at.
As a continuing real estate investor and because of point 3, I would welcome a correction. I would continue to invest and take advantage of a few good buys.
This is the most important reason: I am wildly profitable on all of my real estate investments. I finance my purchases, and because of this leverage my return on investment is not %10.6 from may to may of last year it is over %50+