Toronto Area Home Prices – A Sign of What’s to Come?
Some of the best real estate investing opportunities come up when the market is in a downturn, so when I see prices going down, or when I see value-adding incentives being included, I pay attention. And right now I’m paying a lot of attention to the Greater Toronto Area.
I’ve been watching the markets and talking to some local agents, and what I’ve found is interesting, to say the least. The Toronto area market is changing. In fact, Toronto new home prices fell at the fastest pace in more than two decades last October – evidence that tighter mortgage lending rules may have slowed the boom we’ve been experiencing for the last few years.
That’s not to say that prices are just going to drop. Home prices in Toronto and surrounding areas are still pretty high all things considered, but there are also some bold examples of properties selling for a lot less now than they did just two years ago. An agent friend of mine sent me a couple of really interesting examples, and honestly, I think these are some of the best deals in the GTA.
Deal #1 – A detached home in North Toronto (not pictured) sold for $1.6M in March of 2017, and this past January it sold for $1.1M. This property is a war-time bungalow with three bedrooms on the main floor and one below grade. These types of houses used to be found all over Toronto and its surrounding areas, but these days they’re few and far between as builders have torn them down to build larger, more luxurious homes. My guess is that this one won’t be around much longer.
Deal #2 – A five-bedroom detached house in Richmond Hill (not pictured) sold for $2.12M in July of 2016, and almost two years to the day later it sold for $1.8M. Built in 1996, it’s more of a luxury home than the first example, with nice finishes and a lot of square footage. The last owners claim to have put in $200,000 worth of upgrades, so that price drop had to hurt!
Deal # 3 is a little different in that it’s a new development and there are still units available. These townhouses from Fifth Avenue Homes, Richmond Hill offer great value for the price point (starting from the high 900’s) AND I’m working with them to add even more value. I’ve secured a number of the available units and upgraded them with things like heated floors, coffered ceilings and home automation – in total over $135,000 worth of free bonus upgrades per home.
While some of the numbers here may seem high, if you live in the GTA you won’t be surprised. This is still a challenging market to get into, particularly for first-time home buyers. A price drop of $400,000 might not seem helpful if the property is still over $1M, but what it signifies is that things are changing. And the added incentives to new-builds are another indicator. Demand is still high throughout the GTA, but so is the possibility of finding a deal with great value and some very good long term rewards. For me, investing in real estate is all about long term return on investment, which is why I’ve added all of these upgrades to Scott McGillivray COLLECTION of homes.
So what do you think? Are these prices and value-adds a sign of things to come, or just some stand-alone examples that have little to do with the big picture?