Toronto Condos

sothebys

416.247.1267

FIND CONDO BY NEIGHBOURHOOD

Aug 26 WHAT HAPPENS TO CONDOS DURING MARKET VOLATILITY? article

Condos-vs-stocks

Susan

Schedule Appointment

View Profile

CLICK TO CALL MY CELL NOW

Working with hundreds of pre-construction condo investors each year, we invariably have the "how does the current stock market volatility affect the condo market?" conversation on a daily basis.

Clients are usually shocked to hear our response:

"This is an EXCELLENT time to invest in Toronto's pre-construction market."

HERE ARE THE FACTS...

Before I begin, I'd like to point you to an article in the Toronto Star written by my good friend George Carras, president of RealNet Canada.

(RealNet tracks every new home sale in Canada, and is the authority on statistics and data for the Canadian real estate industry).

In this article, Mr. Carras shows the difference between the TSX (Toronto Stock Exchange) and the Toronto High Rise Condo index price, provided in dollars per square foot.

The chart above is taken from this article.

It clearly shows that during the 2008 financial crisis, Toronto's pre-construction condo market was one of the ONLY markets that did NOT lose value or go "down".

The article also mentions that if you compare the performance of the two markets over the last five years, the TSX is currently up approximately 5 per cent (with considerable volatility) while the RealNet High Rise Index Price is up approximately 53 per cent (with very little volatility).

SO WHY IS TORONTO'S PRE-CONSTRUCTION CONDO MARKET SO HOT, AND YET SO STABLE?

During our workshops and client consultations, we cover this info in much greater detail.

To give you a snapshot, here are what we consider the top 4 factors:

A) IMMIGRATION

Unlike most other cities in the world, Toronto is very unique in terms of population growth. According to Stats Canada, there are approximately one million new people expected to come to Toronto over the next 10 years - and these people need a place to live.

RealNet states that the Greater Toronto Area requires 40,000 new homes to be built each year, and we actually have a SHORTAGE! We can't keep up with demand, which constantly raises prices.

There's also the Greenbelt policy instituted a few years ago, which protects a vast area of land surrounding the GTA from density. Basically, we're at an all time low in terms of supply of new low rise homes, since developers can't build in the protected areas, forcing developers to build 'up' (aka - condos!)

2010 was the first time that condos sales surpassed homes sales in the GTA.

As long as immigration policies stay the same, which they are expected to for a long time, we will always have a strong demand in Toronto.

B) INTEREST RATES

Interest rates are another key factor. With interest rates at all time lows, more people can afford to buy versus rent, and condos become more and more attractive to investors. With new home prices (low rise) being out of reach, however, first time buyers are almost forced to purchase condos.

We must always carefully watch what happens to interest rates. Due to the current economic crisis, and with more capital moving out of stocks and into bonds, interest rates are expected to stay low - which is GREAT news for the condo market.

C) CANADIAN BANKS

Canada has one of the most stable banking systems in the world - in fact, we are the envy of the global financial markets. We also have extremely stringent rules when it comes to construction financing and real estate investing.

For example, a developer will typically need to sell 70-80% of units in a new project prior to receiving construction financing. Plus, recent changes to mortgage rules require investors to deposit a minimum of 20% on a new condo purchase.

Bottom line - don't expect a U.S. melt down in Canada any time soon!

D) LEVERAGE

When you purchase a pre-construction condo, a developer will typically only require 15-20% within the first year. When you purchase at the start of a project (which we always recommend), there is a 3-5 year window until the project is completed. During that time, your ONLY investment is the deposit.

To illustrate this benefit - if you purchased a $300,000 condo 5 years ago, your investment would have been $45,000 (or 15%). Based on RealNet's figures above, the index price has increased by 53% - which means this unit could be worth $459,000 (a 53% increase on the value of the unit)

But remember - you only invested $45,000, so this increase actually represents an approximate 353% return on your investment!

PLUS - if you had an assignment option in your original agreement, you could 'assign' your unit before closing at current market value, without worrying about closing costs, mortgages, or land transfer taxes!

WANT TO LEARN MORE?

The team at Toronto Condo Boutique and Condo Academy are currently offering Condo Investor Mastermind Sessions - groups of 8 to 12 condo investors in a private 2 hour educational session to learn how the industry works, how to receive the best deal, where to invest, and how to make the most return on your investment.

These sessions are typically $250, but as a special promotion use promo code "REALNET" in the form below before September 30th to receive a free ticket to one of these sessions.

If you would like to book a spot at one of these sessions, please fill out the following form:

 

The-madison-condo-toronto_thumb THE MADISON CONDOS | THE MADISON AT YONGE & EGLINTON | THE MADISON CONDOMINIUMS

Coming Soon by Madison Properties Inc:

THE MADISON CONDOS AT YONGE & EGLINTON





Stay tuned and sign-up for exclusive access to full details

TO PRE-REGISTER FOR THE MAD

...

Peter-street-condo_thumb PETER STREET CONDOS | PETER STREET | PETER STREET CONDOMINIUMS

Coming Soon by CentreCourt Developments:

PETER STREET CONDOS



...at the corner of Peter and Adelaide in the heart of Toronto's Entertainment District.

THIS PROJECT LAUNCHE...

Pace-condos_thumb PACE CONDOS | PACE | PACE CONDOMINIUMS

Coming Soon by Great Gulf Homes:

PACE CONDOS



...downtown tower suites starting at the low $200's.

TO PRE-REGISTER FOR PACE CONDOS AND BE THE FIRST IN THE CITY TO RECEIV

...

Expo-condos_thumb EXPO CONDOS | EXPO CITY | EXPO CONDOMINIUMS

Coming Soon by Cortel Group:

EXPO CITY CENTRE CONDOS



...a master planned community in the heart of Vaughan's City Centre, adjacent to the upcoming new subway station in Vaugh...

3018-yonge_thumb 3018 YONGE CONDOS | 3018 YONGE STREET CONDOMINIUMS AT LAWRENCE PARK BY LANTERRA DEVELOPMENTS | 3018 YONGE | 3018 YONGE CONDO

Coming Soon by Lanterra Developments:

3018 YONGE CONDOS



...located at 3018 Yonge Street, steps south of Lawrence Avenue, in the Lawrence Park neighbourhood.
- A ONE MINUTE w...

Tcb-master_thumb 21 GRENVILLE CONDOS | 21 GRENVILLE | 21 GRENVILLE CONDOMINIUMS

Coming Soon by CentreCourt Developments & Lifetime Developments:

21 GRENVILLE CONDOS





You will know Lifetime Developments from their recent successful launches such as The...

B-streets-condos_thumb B STREETS CONDOS | B STREETS | B STREET CONDOMINIUMS | B.STREETS

Coming Soon by Lindvest Properties:

B STREETS CONDOS



WANT FIRST ACCESS INTO THIS PROJECT AT THE LOWEST POSSIBLE PRICING? PRE-REGISTER TODAY FOR B STREETS CONDO BELOW AND REC...

The-york-harbour-club-condos-west-harbour-city-phase-3_thumb THE YORK HARBOUR CLUB CONDOS | WEST HARBOUR CITY PHASE 3 | YORK HARBOUR CLUB

Coming Soon by Plazacorp:

THE YORK HARBOUR CLUB CONDOS





TO PRE-REGISTER FOR THE YORK HARBOUR CLUB CONDOS AND BE THE FIRST IN THE CITY TO RECEIVE FLOOR PLANS AND PRICING

...

Casa2_thumb CASA 2 CONDOS | CASA 2 | CASA 2 CONDOMINIUMS | CASA2 | CASA2 CONDOS | CASA2 CONDOMINIUMS

Coming Soon by Cresford Development Corporation:

CASA2





TO PRE-REGISTER FOR CASA2 CONDOS AND BE THE FIRST IN THE CITY TO RECEIVE FLOOR PLANS AND PRICING, FILL OUT THE F

...

Pier27phase3_thumb PIER 27 PHASE 3 CONDOS | PIER 27 PHASE 3 | PIER 27 PHASE 3 CONDOMINIUMS | PIER 27 PHASE3

Coming Soon by CondoSky:

PIER 27 PHASE 3





TO PRE-REGISTER FOR PIER 27 PHASE 3 CONDOS AND BE THE FIRST IN THE CITY TO RECEIVE FLOOR PLANS AND PRICING, FILL OUT THE FOLLO

...

Mondial_thumb MONDIAL CONDOS | MONDIAL | MONDIAL CONDOMINIUMS |

Coming Soon by Great Gulf Homes:

MONDIAL





TO PRE-REGISTER FOR MONDIAL AND BE THE FIRST IN THE CITY TO RECEIVE FLOOR PLANS AND PRICING, FILL OUT THE FOLLOWING FORM:



...

Monde-condos-toronto_thumb MONDE CONDOS | MONDE | MONDE CONDOMINIUMS |

Coming Soon by Great Gulf Homes:

MONDE CONDOS



Toronto Condo Boutique will definitely be first at revealing details for Monde Condos as they become available.

There is def...

The-bond-condos_thumb THE BOND CONDOS | THE BOND | THE BOND CONDOMINIUMS |

Coming Soon by Lifetime Developments:

THE BOND CONDOS



SUSAN AND GIOVANNI FROM TORONTO CONDO BOUTIQUE HAVE GUARANTEED FIRST ACCESS INTO THE BOND CONDOMINIUM PROJECT - REGISTER

...

210simcoe_thumb 210 SIMCOE CONDOS | 210 SIMCOE | 210 SIMCOE CONDOMINIUMS |

Coming Soon by 210 Simcoe Joint Venture:

210 SIMCOE





TO PRE-REGISTER FOR 210 SIMCOE CONDOS AND BE THE FIRST IN THE CITY TO RECEIVE FLOOR PLANS AND PRICING, FILL OUT THE

...

Perspective-condos-preview_thumb PERSPECTIVE CONDOS | PERSPECTIVE SNEAK PREVIEW | PERSPECTIVE CONDOMINIUMS

Coming Soon by Pianosi Development Corp:

PERSPECTIVE CONDOS



...at the corner of Fontenay and Scarlett, just south of Eglinton.

Spectacular architecture, breathtaking city...

Torontocondoboutique-new-condos-in-toronto-yorkville-plaza_thumb YORKVILLE PLAZA CONDOS | YORKVILLE PLAZA | YORKVILLE PLAZA CONDOMINIUMS |

Coming Soon by Camrost-Felcorp:

YORKVILLE PLAZA





TO PRE-REGISTER FOR YORKVILLE PLAZA AND BE THE FIRST IN THE CITY TO RECEIVE FLOOR PLANS AND PRICING, FILL OUT THE FOLLO

...

Tcb-master_thumb KARMA CONDOS | KARMA CONDOS TORONTO | KARMA

Coming soon to 21 Grenville at Yonge and College...

KARMA CONDOS

Karma at 21 Grenville by Lifetime Developments and CentreCourt Developments

Full details coming soon....

TO

...

« Previous 1

 

Harbourfront_thumb HARBOURFRONT

The HARBOURFRONT neighbourhood extends west from Yonge Street to Bathurst Street along Queen's Quay. East of Yonge to Parliament will be know as the East-Bay front development. F...

St_lawrence_market2_thumb ST LAWRENCE MARKET

The ST LAWRENCE MARKET neighborhood although still part of downtown Toronto, was the actual downtown centre and city hall location during the late 18th and entire 19th century. ...

Yorkville_thumb YORKVILLE

The Village of YORKVILLE began as a residential suburb in 1830 till annexed by the city in the twentieth century. Its classic Victorian homes became gathering places in the six...

Yonge-eglinton_centre_thumb YONGE-EGLINTON AREA

Introducing YONGE AND EGLINTON for the Young and Eligible and Sexy! The Silver City movie multiplex and shopping concourse of the Yonge/Eglinton Centre are a short escalator ...

North-york_thumb NORTH YORK

Inagurated as a township in 1922, a Borough in Centennial year 1967 then it became “The City with Heart" on receiving its charter as The City of NORTH YORK on St.Valentines Day ...

3330178045_4e3da9a626_o ETOBICOKE WATERFRONT

The beach WEST of Toronto offers an abundance of condominiums and town homes to suit every nuance in style for fastidious professionals looking for all the perks in a first hom...

Liberty-village_thumb LIBERTY VILLAGE

The LIBERTY VILLAGE name was recently introduced as a positive 'brand' by the property owners and developers in the area.

Situated just south of the CNE grounds it is bounded b...

Bay-street_thumb BAY STREET

The name for BAY STREET originated in 1797 from the fact that it connected (then) Lot Street (now Queen Street West) to a bay in Toronto Harbour.

The intersection of Bay and K...

Cityplace_thumb CONCORD CITYPLACE

Introducing Concord Cityplace by Concord Adex.

On 44 acres of former railway lands south of Front Street bounded by Bathurst on the West and Spadina on the East, CONCORD CITYPLA...

Bloor-west-village_thumb BLOOR WEST VILLAGE

Between 1873 and 1876, John George Howard, architect, engineer and Toronto’s first land surveyor deeded his estate and his home Colborne Lodge, now a museum, to the City of Toron...

Content-img_0039_background_thumb DOWNTOWN

The DOWNTOWN TORONTO area is the mecca for culture, excitement and diversity. There are many attractions and landmarks that have given the city its immense popularity.

Esteemed ...

King-west_thumb KING WEST

Fifty years ago you would have viewed rundown and neglected old Victorian residences and storefronts from a KING WEST streetcar. Ed Mirvish acquired the grand old Royal Alexandr...

West-don-lands_thumb WEST DON LANDS

The West Don Lands area is an 80 acre space situated next door to the Distillery District and also close by to the St. Lawrence Market and Corktown neighbourhood.

Urban Capital ...

East-bayfront_thumb EAST BAYFRONT

Neighbourhood details coming soon!!







EAST BAYFRONT

Gta-neighbourhood_thumb GREATER TORONTO AREA

The following are condos located outside of the '416' Toronto area in surrounding '905' neighbourhoods.