Toronto Real Estate Market Set for Another Boom on Heels of Strong Technology Market
Toronto’s Strong Tech Industry Points to Another Housing Boom
Toronto and the Greater Toronto Area have one of the strongest, most resilient real estate markets in North America. With consistently strong year-over-year gains in property prices, Toronto real estate is set for another growth spurt, thanks in large part to the strong jobs market, and in particular, the growing technology industry.
Toronto, home to the fourth largest tech hub in North America, is often referred to as the Silicon Valley of the North, attracting tech heavyweights like Microsoft, Google, Apple, Amazon, and Shopify.1 This might help explain why Toronto is the fastest growing city in Canada and the U.S.
And its status as a leading destination for tech companies is getting stronger. Right now, Toronto is the fastest growing tech destination in North America; over the last five years the technology industry in the GTA has advanced by more than 50% and it continues to heat up.
The GTA tech industry currently employs more than 241,000 workers and, when it comes to adding new jobs, is outpacing other North American markets, like San Francisco, Washington D.C., and Seattle. In fact, in 2017, Toronto was the fastest growing tech market, creating 28,900 tech jobs; that’s more than the San Francisco Bay Area, Seattle, and Washington D.C. combined. In the downtown core, technology was responsible for more than a third of office space demand.2
When it comes to relocating, tech companies are looking more and more to Toronto. It ranks as one of the most liveable cities in the world, with economic stability, a growing job market, healthcare, a well-educated workforce, cheaper labour costs, and a robust real estate market.
The Toronto jobs market remains the most robust in the country. Thanks to the large job vacancy rate and red-hot tech and financial sectors, Toronto real estate is expected to pick up with housing prices projected to climb steadily higher over the long-term, especially the condo market.
Mortgage Company of Canada: Helping You Invest in High-Yield, Private Mortgages
The real estate market in Toronto remains robust; it’s the fastest growing city in North America and is home to the fastest growing technology hub. As a result, the real estate market in Toronto and the GTA is expected to go through another housing boom. With demand outstripping supply and a record number of homebuyers being rejected by traditional lenders, like the big banks, a growing number of Canadians are turning to Mortgage Company of Canada to secure their mortgages. At the same time, accredited investors are discovering the benefits of investing in mortgages secured by residential real estate.
Because of stricter lending rules, more and more well-qualified borrowers are being rejected by Canada’s big banks. As a result, Mortgage Company of Canada can be more selective with who it lends to. This has helped it build up a diversified pool of first mortgages, secured by residential real estate in the GTA and Golden Horseshoe.
Because of Mortgage Company of Canada’s strict due diligence process, we have been able to provide qualified investors with above-average yields. In June 2019, Mortgage Company of Canada investors realized a tailing 12-month yield of 9.25%, with distributions paid monthly. Our minimum annual target is 9.25%. Had you invested $100,000 with Mortgage Company of Canada in 2009, in May 2019, your equity would be worth $273,636.3
In May, our total mortgage portfolio was valued at $258 million. Over the last 12-months, our mortgage portfolio has increased by more than 50% and in May, we funded an additional $20 million in mortgages. In June, Mortgage Company of Canada set another record, with mortgage originations surpassing $26 million for the first time.
Mortgage Company of Canada is funding more mortgages than ever, with a portfolio quality that continues to improve. The average funding size is $332,000 with an average portfolio duration of approximately six months.
The average appraisal value of the 777 mortgages in our portfolio is $805,000. Of those, 81% are located in the GTA, 11% in the Golden Horseshoe, 5% are in major urban centers, and 3% are in Ottawa.
The majority of our portfolio (77%) is made up of first mortgages; the remainder (23%), is comprised of second and third mortgages.
Part of our ongoing success can be attributed to our seasoned management team, which has a combined 45+ years of experience in real estate, public market, and risk market, and is one of the most knowledgeable in the Mortgage Investment Corporation (MIC) industry.
On top of that, Mortgage Company of Canada is unique in the MIC industry in that it is overseen by an independent Board. It also follows a stringent underwriting analysis and leverages its third-party mortgage brokerage relationships as well as affiliated mortgage brokerage for quality mortgage originations.
For these reasons, Mortgage Company of Canada recently won a Private Capital Markets Award in the Mortgage Fund category. The Private Capital Markets Awards are the only national industry awards for private capital markets professionals.
Our management team believes in what we do. That’s why we have invested more than $11.2 million in Mortgage Company of Canada, on the same terms as our investors, ensuring our investments are aligned.
To find out how you can become an accredited investor with Mortgage Company of Canada, visit our web site or contact us at 1-866-318-7222.
1. Kavcic, R. “BMO Blue Book,” BMO, Winter 2019; https://economics.bmocapitalmarkets.com/economics/reports/20190205/BB2019-en.pdf.
2. “Scoring Tech Talent in North America 2018,” CBRE Group, Inc., last accessed July 8, 2019; https://www.cbre.com/research-and-reports/Scoring-Tech-Talent-in-North-America-2018.
3. “May Newsletter,” Mortgage Company of Canada web site, last accessed July 8, 2019; https://www.mcoci.com/wp-content/uploads/2019/07/Mortgage-Company-of-Canada-May-2019-Newsletter.pdf.