One question investors have to ask themselves in 2018
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So, more and more people are catching onto this trend that we’ve been about here at True Condos for the past year or so, which is the divergence between the condo market and the low-rise housing market. This article’s from Bloomberg, and the headline is Toronto’s Tale of Two Markets Is Hot Condos and Cold Houses.
So, again, it’s just going to the fact that if you’re looking to sell a house right now, the market’s very slow and people are talking about how, “I wish. I should’ve, could’ve sold my house a year ago, and I would’ve made 1.5 million or whatever it is, and now I’m trying to sell it for 1.2 or something and it’s not selling.” On the other hand, condos are going like crazy and especially everything downtown is getting five, 10, 15 offers. Everything’s selling way over asking. Prices are still appreciating. They’re literally going in the opposite direction of houses. And once again, the reason for this, if you’ve been watching these videos and listening to the podcast, you already know it’s the government regulations and the distortion that they’ve caused in the market.
If you are an investor right now, you’re thinking about a couple of things. One is you’re thinking if I buy a condo today, it’s probably going to be worth more tomorrow because prices are escalating significantly in the condo market, and you’re thinking, if I’m looking to buy a low-rise detached house today, I don’t know what the price is going to be worth tomorrow.
Prices have come down significantly from their highs of last spring. They came down immediately in the summer of last year. They’ve been pretty flat since last summer, but they’re certainly not going up overall. That being said, of course, houses in the core of Toronto, on the subway line, south of Bloor Street in that young university kind of corridor where the subway goes, those houses are still appreciating. Those houses are still getting multiple offers on them, most of them, but we’re talking about houses in the outside of the core of Toronto, and particularly in 905. Those properties are struggling.
So, if you’re an investor, you’re thinking, do I want to get into that sort of a property because I don’t know what’s going to happen with prices, or you might actually be thinking the opportunity is now because prices have come down, and at some point they are bound to go back up, especially as condo prices continue to rise and the gap between houses and condos is shrinking. So, that’s the thought process that you’re going through, and that’s what you’re going to have to look at in 2018.
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