Dip in Real Estate Means Now is the Time to Buy Investment Property

The Toronto Real Estate Board’s recent Market Watch report held some promising revelations for anybody looking to invest in the city’s real estate market. November saw Toronto-area homes continue to fall in price, coming down 8.8% since May of this year. This recent drop is being reported as the most significant price decline in a six-month period since 2000. If you’ve been waiting to purchase a Toronto investment property, the time to act is now.

What does this mean for the Toronto real estate market?

In an eight year first, the average price of a home sold in the city of Toronto has failed to exceed the levels of a year earlier. The data collected by the Toronto Real Estate Board shows that the lowering real estate prices is in turn boosting demand and encouraging sales. With looming changes in mortgage lending guidelines arriving in the new year, it appears buyers are jumping at the opportunity to invest before the new rules coming into effect. “We have seen an uptick in demand for ownership housing in the GTA this fall, over and above the regular seasonal trend,” commented TREB President Tim Syrianos.

What does this mean for real estate investors?

The recent downward trend in Toronto area real estate prices means that this is the perfect time for prospective investors to jump into the market. TREB shows that new home listings are up by more than 37% since last November, making it a very attractive time for new investors to break into the market and be able to easily find a residential investment property that fits all of their needs. With demand for home ownership within Toronto rising steadily, now is the time for investing.

New mortgage rules in 2018 will affect first-time buyers

New mortgage qualifying rules arriving in January 2018 are prompting Toronto homeowners to list their properties in an attempt to sell before the arrival of what is being called a “stress test” for uninsured mortgages. The new rules will see the minimum qualifying rates for uninsured mortgages to be greater than the Bank of Canada’s current five-year benchmark rates, which currently sit at 4.89%, or 200 basis points above a mortgage holder’s contractual rate. The stress test will have its largest impact on first-time real estate buyers, resulting in larger down payments and higher interest rates, making real estate investing far less affordable for real estate rookies – and leaving the field wide open for investors.

Why is this the time to invest?

This recent dip in Toronto-area real estate prices is the perfect time for less experienced investors to get their foot in the door, especially with the threat of new lending rules looming. The new rules mean that first-time buyers will be able to buy 20% less on average – and that’s only if they pass the “stress test” first. With Toronto housing prices down, real estate listings rising steadily, and upcoming mortgage lending rule changes on the horizon, there’s never been a better time to invest in your first investment property.

Acting now will save you money and stress in the long-run, and provide you with a steady supply of rental income to pay for your new investment. By waiting until the new year to invest, you’ll be running the risk of higher down payments, adding a co-signer to your future investments, or losing out on your investment completely. If you’re serious about purchasing an investment property in Toronto, now is the time to act. Highgate specializes in finding and managing investment properties for Toronto-area real estate investors, and can help you capitalize on the opportunity this dip in the market has presented.

For information on how Highgate Properties can make your Toronto real estate investing and management easier, visit our website or contact us today.

By |2018-06-05T16:05:59+00:00December 11th, 2017|Buyers, Mortgages, Real Estate Investments, Residential property, TREB Market Watch|Comments Off on Dip in Real Estate Means Now is the Time to Buy Investment Property
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