The low Canadian dollar and weak energy prices are creating excellent real estate opportunities across the country, but especially in the Greater Toronto Area. In the current residential real estate market, Toronto housing sales and prices continue to outpace the rest of the country. On top of that, housing costs are rising faster than the average Canadian income, which translates into an expanding rental market.
This has created an excellent opportunity for Canadians to diversify their investment portfolio with a mortgage investment company (MIC). An MIC is an investment company that provides private mortgage lending services; in most cases, residential real estate. As an alternative investing strategy, an MIC allows Canadians to invest in secure real estate with high returns. Owning shares in a MIC allows you to invest in a company that manages a diversified pool of mortgages.
Toronto Continues to Be a Top Market for Real Estate Investing
Despite slower economic growth in Canada, the real estate market in the Greater Toronto Area is thriving. As economic growth returns to the east, in particular Toronto, investors are turning their attention to new, high-growth, high-yield opportunities in faster-growing Toronto.
Toronto reported its strongest economic growth in four years in 2014 at 2.9% and the city’s economy is expected to grow by 2.6% in 2015 and 2.8% in 2016; this will result in higher housing starts. New home construction is projected to increase almost 20% to 34,700 units in 2015 from 29,000 units in 2014.
Meanwhile, real estate prices and sales for existing homes across the GTA remain robust, with transactions hitting a record high of 8,200 in September. Sales for the first nine months of 2015 were at a record 80,331, putting the city on track to break the 100,000 mark.
Prices for existing home sales climbed an eye-watering 9.2% in September, with the average selling price for all home types in Toronto reaching $674,922. Across the GTA, the average selling price was $597,947.
Top Trends to Watch in Toronto Real Estate
Not all real estate in the Greater Toronto Area is created equally. While living in the downtown core will continue to be popular, investments in infrastructure will make living in the suburbs more attractive to a wider group of people. And, as demand for real estate in the core of the city increases, so too will housing prices.
Strong supply and demand for housing in Toronto has created concerns about affordability. A number of Toronto residents are now choosing to rent rather than buy. This is creating new opportunities for those looking to take out a second mortgage and invest in real estate for the sole purpose of renting.
Popular Property Types
Because housing affordability is out of reach for many, some are instead choosing to rent. As a result, demand for purpose-built multi-residential rentals will remain strong in Toronto.
Single-family homes will continue to be popular in the Greater Toronto Area as supply dwindles and prices continue to climb year-over-year. Those who do not want to live in a smaller house or condominium in Toronto or cannot afford to live in the downtown core will be willing to commute longer distances in order to find affordable housing.
Demand for condominiums in the city centre remains strong for younger people looking to step onto the property ladder and retirees looking to downsize and embrace the urban core.
Mortgage Company of Canada Inc: Providing Canadians with High-Yield, Secure Investment in Real Estate
As a general rule, Canadian investors are underexposed to real estate as an investment class. One way Canadian investors can take advantage of the GTA’s strong real estate market is to invest in high-yielding Canadian residential real estate mortgages.
The Mortgage Company of Canada Inc. specializes in lending to specific sectors of the mortgage market, historically those under serviced by private and institutional lenders in terms of loan type, amount, and geographic location. Demand in these sectors has continued to be strong through the recent credit crisis and resulting economic downturn.
Throughout periods of uncertainty, the Mortgage Company of Canada has maintained its focus on a number of critical underwriting criteria that have mitigated the portfolio’s overall risk. As an alternative investing strategy, this has allowed us to generate positive returns no matter what the broader market is doing.
To find out how you can diversify your investment portfolio with Canadian real estate mortgages, contact Mortgage Company of Canada Inc. at 905-886-5352 or 866-318-7222. Or by e-mail at email@example.com
“Toronto Among Top Economic Performers in 2015,” The Conference Board of Canada website; http://www.conferenceboard.ca/press/newsrelease/15-09-23/toronto_among_top_economic_performers_in_2015.aspx.
“GTA Realtors Release Monthly Resale Housing Figures,” Toronto Real Estate Board website; http://www.torontorealestateboard.com/market_news/release_market_updates/news2015/nr_market_watch_0915.htm.
“Top Trends in Canadian Real Estate 2016,” pwc.com, http://read.ca.pwc.com/i/582187-emerging-trends-in-real-estate-2016?utm_source=page&utm_medium=referral&utm_campaign=etre2016.