Toronto real estate market; Cheap comparatively worldwide?
Has it occurred to you that perhaps real estate in Toronto was simply too cheap for far too long? In fact, a case can be made that it is still too cheap. Perhaps this hot real estate market is simply the result of catching up, in order to reach normalized values.
I am not equating the GTA to Alpha++ cities such as New York, Hong Kong, Singapore, and Beijing. But stop and think for a second, where in those cities can you get a 1 bedroom 1 den condo for less than 350k? In fact, where on Manhattan can you get a semi detached for around 1mil? Those would be considered a bargain in those cities, yet it is considered overpriced in Toronto.
We all know that Toronto is a destination city. It's not Chicago, Detroit, or St. Louis. The GTA is project to grow 40% in population by 2036, yet where are these people going to live?
We all know that roughly 50k immigrants settle in Toronto annually. From their perspective, properties in Toronto are simply too cheap not to buy (even now).
If it weren't for rent control and the stagnation of wages, real estate properties would be considered quite the bargain. Do you know what $1500 gets you in Manhattan? A shoebox... a shoebox you sublet from someone else who rented the apartment.
At some point, rent control will loosen, wages will increase, and more immigrants will settle in the GTA. These prices are only going up. Not forever, but at least until the prices have reached an equilibrium with demand.
In 20 years, the GTA is project (on the low end) to contain just over 9 million people. That is 3.2 million extra people, where are they going to live?