Realosophy Realty has put together this comprehensive & detailed report which points to a high level of investor demand in the GTA, specifically in York and Durham Region when compared to just four years ago.
Moving forward, author John Pasalis encourages people to think more like investors and less like speculators. And yes, there is a difference. Make knowledgeable choices and decisions. Don't be a sheep.
Source: Realosophy Reality Inc. , Special Report, March 2017
Lack of government data and competing explanations for Toronto’s skyrocketing real estate prices have resulted in uncertainty about whether the market is becoming unstable.
Using an innovative method of measuring investor demand which looks at the number of houses being bought and immediately rented out, Realosophy’s John Pasalis finds evidence of speculative activity across the Greater Toronto Area, specifically:
- These investors are responsible for 17-21% of all sales in Aurora, Newmarket and Richmond Hill and 36-39% of all sales in some of the GTA’s hottest neighbourhoods.
- Whitby, Ajax and Oshawa all saw the steepest increase in sales to investors of over 400% in just 4 years
- An estimated 95% of all investment properties purchased in 2016 are losing money every month.
- This subset of investors in the GTA real estate market alone accounted for 10% of all sales; all investors could be responsible for as much as 25%-30% of all sales.
This behaviour, emblematic of bubble markets according to leading economists, not only prices out regular buyers, but eventually risks a market correction affecting all property owners.