The Toronto loft market is showing no signs of slowing this summer in what’s traditionally a down season. TREB recently released July stats that show a continuation of the hot run for Toronto condo and loft sales. Normally, we'd be advising clients to hold on selling until the fall but lack of inventory with lofts and stronger demand than years' past should give sellers pause for thought about listing now and not waiting until after Labour Day.
For buyers, you need to be careful not to overpay in a hot market which means patience - it may take a little longer than normal to score the right home for you and you may need to let a unit go if you're caught up in a bidding war that hits silly levels. And with the increase in condo inventory this year, it's more important than ever to get the right advice and choose your property wisely - don't assume every condo or loft is going to be a wise investment.
Let's take a closer look at July's market report.
Sales of Toronto condos, which include Toronto lofts, had a pretty dramatic year-over-year rise this past July of nealy 14%. You can see that condos and lofts in the 416 are the only Toronto property type to show a rise in sales over the same period last year. You can read the full July market watch on TREB’s website.
In terms of the reasons behind this dramatic jump in units sold, it's not really all that surprising. Many more people are staying in condos and lofts longer as they're priced out of the housing market. Even for those who can afford to buy a house in Toronto, lack of inventory and aggressive bidding wars are leading to a situation where it takes a lot longer for people to find and "win" a house. On top of that, cheaper credit and the ability to buy with as little as 5% down has opened up the option of real estate to many more buyers than ever before.
So, not surprising, more people are turning to Toronto lofts for sale and condos. The trends we're seeing with houses becoming increasingly unaffordable and just plain unavailable, coupled with low-interest mortgage rates, rises in uban population and, yes, foreign investment, has kept the Toronto condo market incredibly robust.
That said, a robust market is no guarantee of growing your personal wealth through real estate. As in any market, you have to buy wisely. And that starts with weeding through all of the misinformation and bad advice.
There's a heck of a lot of extreme POVs on either side of the spectrum in reaction to these kinds of sales figures. There's the blind faith, "the market will only ever go up!" crowd and the doom-and-gloom, "a crash is a 'comin and you'll all end up owing more than you own" set.
We actually have a much more moderate view of what’s happening in the market this summer. Listen, any agent that tells you that every Toronto real estate purchase is a wise investment and you can't go wrong is simply blowing smoke.
There are a ton of great lofts for sale in Toronto that are not only amazing spaces to call home, they will also grow your investment faster and with less risk than almost any other type of investment opportunity out there right now (and you need a place to live anyway, so why would you not want to make your loft an investment as well?)
Remember, that 4% year-over-year growth figure you see in TREB’s reports is the average for all Toronto condos There are so many Toronto loft buildings we can show you that are outpacing the average condo by miles. But make no mistake, there are also a lot of bad investments out there where you'll be lucky to break even on three or four years down the road come re-sale; we see this happen a lot with new construction buildings that are grossly over-priced at time of pre-con sales and so buyers end up spending years just playing catch up to the rest of the market.
In short, hot market or not, not every Toronto real estate purchase is a smart one. You want to be one of the buyers outperforming the norm and it can be done, if you're smart about what you buy, where you buy it and how much you spend. And you have a great opportunity to grow that investment above average with a Toronto loft, particularly an authentic, hard loft, because of their sheer rarity and high-demand.
Whether you're buying or selling, make sure to consult a Toronto loft expert who has your back and will ensure you avoid common mistakes - have a read of our previous post on some of the worst real estate advice we've heard to get you started.