The Toronto residential real estate maintained its record pace in September, as sales hit a record number of transactions and prices continued to climb unabated. Thanks to near record low interest rates and an improving economy, real estate in the Greater Toronto Area will continue to be seen as an excellent long-term investment.
Toronto Real Estate on Record Pace
Real estate prices and sales across the entire Greater Toronto Area remain very strong, with transactions hitting a record high in September and prices climbing a staggering 9.2% year-over-year.
Specifically, real estate sales were up 2.5% in September at 8,200, putting the city on track for a record in 2015. Sales through the first nine months of the year were up 9.5% at a record 80,331. It is widely expected that Toronto sales will be near or at the 100,000 mark for the first time.
Toronto real estate price gains have been equally as impressive. The average selling price for all home types in Toronto (416 area code) was up 7.8% at $674,922. For the rest of the GTA (905), prices were up 10.1% at $597,947. The average selling price for all home types combined was up by 9.2% at $627,395.
The biggest increase in September was in the price appreciation of single family dwellings and townhouses in Toronto. A detached home in Toronto is now going for close to $1.1 million, a 10.7% increase over the previous year. Townhouses are up 10.8% at $527,257.
Interest Rates to Stay Near Record Lows Until at Least 2017
Both the record sales and price gains are being fuelled by near record low interest rates. The improving economy and balanced housing market means real estate activity across the Greater Toronto Area will continue to expand at a reasonable rate.
On top of that, the strong sales and consistently rising housing prices are a testament to how much first-time home buyers and those selling value home ownership in the GTA.
While some analysts expect sales and prices to moderate a little in 2016, the real estate market in the Greater Toronto Area will continue to be robust because interest rates are expected to remain unchanged until early 2017. While the economy in Southern Ontario remains solid, the same cannot be said for the entire country. As a result, the broader Canadian economy is not strong enough to warrant a rise in interest rates.
The continued low interest rate environment and economic growth will both support home sales and upward price trends throughout the remainder of the year and into 2016.
Mortgage Company of Canada: Helping You Invest in Private Mortgages
While the economy is recovering, the resource-heavy Canadian stock market is being hit by low oil prices. As a result, investors are more concerned than ever about where their money is going and what kind of returns they are going to see.
When it comes to equities, Canadian investors are underexposed to real estate as an investment class. One stress-free way investors can take advantage of Toronto’s robust real estate market is to consider high-yielding Canadian residential real estate mortgages.
The private mortgage market is a multi-billion dollar industry in Canada growing at an incredible rate. In 2011 and 2012, $985 million was raised in the public market for mortgage investment corporations (MICs) versus just $237 million in the preceding 10 years.
A MIC is an investment company that provides mortgage lending services, primarily residential. Owning shares in a MIC allows you to invest in a company that manages a diversified pool of mortgages.
The growing demand for MICs as an investment vehicle is being driven in large part by the market’s desire for better risk adjusted yield. As an alternative investment strategy, a MIC is designed to generate positive returns no matter what the broader market is doing. A well-managed MIC should continue to generate good yields even while equity markets underperform.
To find out how you can diversify your investment portfolio with Canadian real estate, contact the Mortgage Company of Canada Inc. at 905-886-5352 or 866-318-7222, or by e-mail at email@example.com.