It is popular in the media to speculate on what will happen with condominium prices in the Greater Toronto Area in the future. I agree with the industry experts who content that prices will continue to rise, even if they have not skyrocketed as aggressively as those of low-rise homes.
Let’s look at the basics. We have been hearing for years about the Oak Ridges Moraine Conservation Plan and Ontario’s Greenbelt Act greatly limiting the land supply for low-rise. Remember that available land for urban high-rise development is dwindling, too – especially in downtown Toronto, where Lake Ontario forms the southern border. Combine lands scarcity with ever-increasing taxes, development, labour and materials costs, and price increases seem inevitable. Of course, resale prices have been increasing too, so even as condo prices go up, they will still represent remarkable value.
Keep in mind as well that condominiums have become a robust source of rental accommodations across the GTA, and as rents rise, investors see a healthy return-on-investment when they purchase new suites. It is interesting that as condos have increased the rental supply in the city, the rental market has doubled in the last few years. This is likely because a lot of people who would like to own have not yet saved enough for a down payment. In addition, Toronto and the GTA are growing quickly, with the influx of immigrants every year. The point is that now is the time to get into condominium ownership, while mortgage interest rates are still incredibly low!