Why Ontario Is the Best Place in the World to Invest in Real Estate

Andrew la Fleur: Ontario is the best place in the world to invest in real estate. Find out why on today’s episode. Welcome to the True Condos Podcast with Andrew la Fleur, the place to get the truth on the Toronto condo market and condo investing in Toronto.

Andrew la Fleur: Hi, and welcome back to the show. Thanks again for tuning in. As always, your host here, Andrew la Fleur from truecondos.com. And just a quick reminder before we jump into it, if you are not already subscribed and getting my weekly email updates, make sure you do. Go to truecondos.com, sign up with your name and email anywhere, and make sure you don’t miss out on the great investment opportunities that we have coming up. Some good ones for sure coming up this year, so make sure you’re getting that weekly email from me. It’s the best way to know about investment opportunities, and many of them are unadvertised, and the only way to find out about them is through that weekly email.

Andrew la Fleur: So I want to talk to you on today’s episode, as I said, about why Ontario is the best place in the world to invest. And this is a point and a theme that I’m going to be hammering home again and again and again on the podcast for you. It’s something I have talked about a lot in the past couple of years on this show. If you’re new to the podcast, though, you might not have heard as much, so this is certainly especially important for you if you’re new to the show, and that is we’re talking about the population growth of Ontario. Ontario has amazing, incredible population growth, which makes it a great place to invest in real estate. We’re just not able to build enough new homes to keep up with the population growth that is coming in.

Andrew la Fleur: Putting aside economic growth, putting aside job growth and interest rates and all of the many, many other factors that go into real estate, just looking at population growth alone that is happening in Ontario and that is forecasted to happen in Ontario over the next few years and decade to come makes Ontario very unique on the world stage as a region, as a province, or compared to other similar regions around the world, especially in the Western world. Ontario’s got something incredible that we just are often forgetting about, missing out on, not thinking about, just passes us by, take it for granted.

Andrew la Fleur: So again, I’m here to help you not take this for granted, not to think that it’s normal, not to think that it’s always going to be this way or that it always was this way or that everywhere you go around North America and the Western world that this is normal. It’s not. We have something very unique. We’re in a very unique position here, so as investors, if we’re making decisions to invest today, we’re going to reap rewards because of this huge population growth in the years ahead.

Andrew la Fleur: Came across some very interesting statistics that I want to share with you in regard to this. Number One, as I said, we’re getting more growth than anywhere else. Look at Ontario’s population growth over the last year. It’s gone up by approximately 257,000 people. Ontario’s population has increased over the last year, only the last year, by 257,000 people. Huge growth. How does that compare to other … So Toronto being the anchor of Ontario, let’s look at other similar nearby states in the US that also have similar large anchor cities.

Andrew la Fleur: First, let’s look at Illinois, with Chicago. Toronto, often compared to Chicago. Illinois population is declining. They’re actually shrinking. It’s not that they’re growing less than Ontario, it’s not that they’re not quite where we are. They’re going in the complete opposite direction of Ontario. While we are booming and seeing unprecedented highs in population growth, they are actually shrinking. People are leaving Illinois, people are leaving Chicago, and that’s a big, big problem. If you are a policymaker in government or even if you’re a real estate investor looking to invest, if you’re investing in an area where the population is actually shrinking, that’s scary. Imagine that.

Andrew la Fleur: We think, sure, we’ve got issues in Ontario, and everything’s not perfect here, but we’ve got a growing population base, which gives us great optimism for the future. Imagine being in Illinois and facing a population that’s actually shrinking. So their population’s actually gone down by 45,000 people this … the latest stats just came out in the end of December for the US Census, and 45,000-people population decline in Illinois. It’s actually the fifth straight year that the population has been declining in Illinois. It started in 2014, and over that period from 2014 to today, they’ve lost a total of about 160,000 people, so the population today in Illinois is 160,000 less than it was in 2014. Think about that.

Andrew la Fleur: Population in Ontario versus 2014 Ontario, I don’t have those numbers in front of me, but I would wager that it’s got to be around a million, maybe more, increase. So think about that. A million more people coming into Ontario versus a similar type of region not too far away, being Chicago and being Illinois, a million more people, more than a million people population difference coming in to us versus them. Wow. That is incredible. Imagine how many homes need to be built for those million people, and imagine how many homes need to be built for losing 160,000 people. That’s right, the answer is zero. They need to actually tear down homes to manage the supply and demand there, if you think about that. Incredible.

Andrew la Fleur: Looking at New York State, the Big Apple … and New York obviously right across the border. Just drive two hours from Toronto, and you’re in New York State … their population has also been declining. New York State is a declining-population state. They’ve lost 48,000 people in the last year. Incredible. Again, right across the border. Right there. They’re just our next-door neighbor. We’re up 257,000 people in the same time they are down 48,000 people. Here are some other stats. Approximately over a million people have moved out of New York State over the last decade. Now, that doesn’t mean the population has gone down a million, but over a million people have left the state. And people are coming in, but overall, there’s a population decline happening also in New York State.

Andrew la Fleur: Looking just at New York City, New York City is doing obviously better. It is growing. The New York State as a whole is shrinking, so most of the shrinkage in New York is happening outside of New York City. If you look at New York City alone, though, population increase of 450,000 from 2010 to 2017, okay? So over a seven-, eight-year period, 450,000 for New York City. Toronto, over the same seven-, eight-year period, we know has grown at around 100,000 a year. So we’re growing at around 700,000, 800,000 people over that time period versus New York City only growing at around 450,000, New York City obviously being a much larger city to begin with, a much larger population base.

Andrew la Fleur: So again, on a percentage basis and on an absolute basis, Toronto, the GTA growing at a much faster rate than New York City. Ontario as a region, again, not even close. It’s completely different leagues, growing at 250,000 versus New York State shrinking by 48,000. Zooming out to Canada as a whole … This is … you know, it’s not just a Toronto phenomenon, it’s not just an Ontario phenomenon. Looking at Canada as the whole country of Canada, compared to all the other G7 nations, Canada is growing at the fastest rate of all the G7 nations. This is incredible, this is unique, this is very good news for us as real estate investors to understand what’s happening here in our region and how unique we are and just, again, to encourage you to get out there and invest. The future is very, very bright.

Andrew la Fleur: Again, real estate is a long-term game. This is not about making a quick buck this year, next year, two, three years from now. This is about building and buying assets today that are going to reap rewards for you for the next 10, 15, 20 years. That’s the game that we’re in, and that’s the game we’re playing, and when we hear stats and we see the fundamentals like this, we know that the game is rigged in our favor, and the probability of increases in real estate prices over the next 10, 15 years because of the population growth is very, very high. It’s great news. It’s great news, and it makes Toronto, again, probably the best place in the world.

Andrew la Fleur: Canada is growing the fastest of all the G7. Ontario is … I don’t have all the regions, but it’s looking like it’s potentially the fastest growing subsector of the G7. And you look at zooming down into Toronto and GTA specifically, again, it’s right up there, if not the number-one growing metro area region city of anywhere in the G7s. So absolutely fantastic news, and amazing to see the statistics when you see them broken down like that.

Andrew la Fleur: What’s also very interesting and … Actually, let me just side note here, another article I came across was … and I’ll include a link to this if you want … Hungary, the nation of Hungary, Eastern Europe, they are doing something very interesting. The headline was that they’re offering no income tax for life … get this, no income tax for life for all women who have four children or more. Think about that. As an incentive to have four children or more for women, the state is saying if you do, you don’t have to pay income tax for the rest of your life. Talk about a powerful incentive there. Obviously, when I heard that news, I was like, man, sign me up for that. I have four kids, for those of you who don’t know. I’ve got four kids myself, so yeah, absolutely, sign me up for that program.

Andrew la Fleur: But the point I want to make with bringing that up is just that obviously Hungary is desperate for population growth. And there’s a whole other background story to it, of course, around the story of immigration and that they don’t want immigration, they actually want growth from within. That’s a whole other political topic we won’t get into, but the point is that there are so many places around the world and in the sort of Western world that are desperate for population growth.

Andrew la Fleur: I mean, look at … is Illinois and New York, are we any … It’s just a matter of time before they start offering incentives, as well, for people to move to Illinois, to move to New York, and to be fruitful and multiply and to increase the population and have more children. You need that population growth. These states and these regions in these countries are desperate for population growth.

Andrew la Fleur: Ontario, Canada, the GTA, we have what everybody else around the world wants. Everyone wants to come here. We are growing at an incredible rate, and we’re setting ourselves up for major economic growth in the future versus everybody else is just scrambling to try to figure it out. Here we are, just loving life and growing like crazy. So again, it’s an amazing time for us, as real estate investors, to be a part of this and to see this transformation that’s happening before us and to take advantage of this amazing opportunity that is right in our own backyard.

Andrew la Fleur: Another interesting stat I really want to share with you … and I’ll include a link to all this stuff, again, on the show notes at truecondos.com/podcast … this incredible statistic that … this chart that I came across this week that talks about the extreme economic concentration of Canada if you look at the economic output of the major metropolitan areas in Canada versus the major metropolitan areas in the US, and the percentage of the economic output compared to the country as a whole. Incredible.

Andrew la Fleur: Look at … Let’s start with the US, so New York, Los Angeles, Chicago. New York’s economic output as a percentage of the national GDP, New York is 8.8% of the total national GDP of the US. 8.8% sounds pretty high. One city, almost 10% of the whole country. Los Angeles, as you’d expect, is also a big number, 5.3%. And Chicago, again, we talked about Illinois. Chicago, major city, 3.5%. So 8.8% in New York, 5.3% Los Angeles, 3.3% Chicago.

Andrew la Fleur: How does Toronto compare to those cities? Toronto’s economic output as a percentage of the national GDP is 18.6%. Think about that. 18.6%, almost 20%, so almost one out of every five economic dollars that are created in this country, this massive, huge country of Canada, are created in the Toronto area. Wow. That is incredible when you see that on paper.

Andrew la Fleur: In fact, you add up New York, Los Angeles, and Chicago … New York, Los Angeles, and Chicago, think about the populations there. Think about how the populations of those three cities combined compare to Toronto. New York, I don’t know, roughly 10 million, Los Angeles, similar number, Chicago similar to Toronto. So you’re talking about like, say, 25-ish million, say. 25-ish million people, total economic output as a percentage of the country is … so 8.8, 5.3, 3.5, call it 9.14 … 17, 18 … so 17% or so would be those three cities combined percentage of the total US national GDP, 17%. The total of those three cities is less than just Toronto’s economic output alone, at 18.6%, so three huge cities does not even add up to what Toronto is producing as a percentage of the entire country. Wow.

Andrew la Fleur: Again, there’s so much economic concentration happening in Canada, and again, if you’re an investor, where do you want to invest? You want to invest in the center of the universe, you want to follow the money, you want to go where the wealth is being created, and it is just so obvious and blatant that the wealth is being created in Toronto in the Toronto region and Ontario as a whole. It is an amazing place to invest your money, as a real estate investor, when you have that much of a concentration of population growth and economic growth and just economic output compared to the country as a whole.

Andrew la Fleur: So Canada, amazing place to be, amazing place to live, amazing place to invest, but zeroing in, we know that Ontario and the Greater Toronto Area and this region is an amazing … is just in such a unique position. We’re so unique compared to anywhere else in the world, and certainly compared to anywhere else in the US. So that, again, if you’re an immigrant, as well, coming into Canada, or if you’re migrating from somewhere else in Canada and you’re saying, “Where should I go?” where are you going to go? You’re going to go to the center of the universe, the belly of the beast. You’re looking for the bullseye. Where’s all the … Follow the money. It’s pretty simple. The money is here. More money’s coming here, more concentration of wealth being generated is happening here.

Andrew la Fleur: This is an amazing place to invest. We just are in such a unique position. And again, that’s why I’m doing this podcast, is just to help us understand, as real estate investors, how unique of a position that we are in. So there you go. Hope you found this episode useful, hope you learned something new today that’s going to help you make better decisions as you invest in real estate in Toronto and beyond and Ontario. So thank you so much for listening. Share this episode with somebody who you think could benefit from it. I’d really appreciate that. Leave me a review if you don’t mind, if you haven’t already, on iTunes. That would be great. And until next time, have a great week. Happy investing.

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