CHECKING IN ON TORONTO REAL ESTATE PROPERTIES
Several reports have predicted that Canada’s economy will be better off compared to the economy of other Group of Seven countries, which includes superpowers such as America, United Kingdom, and Japan. Such forecasts were proven last year. America’s economic crunch is well-documented by the media, with the country’s real sector as one of its biggest hits. Because of the crunch, there is not enough demand to fully support America’s real estate sector. American investors are currently looking for business outside their country due to the already saturated market. Even foreign investors have departed from their usual business locations and have expanded in countries in Asia and South America, in countries where investors, years ago, would never have thought a market for real estate could exist. And this situation is not solely exclusive to America. But what makes Toronto different?
For years, economists in Canada have predicted the decline in real estate in the country. However, while the country did experience some drop in sales in the sector, it was not as sharp as the drop in countries such as America or Japan. For example, in the Toronto real estate News, it was reported that Toronto will not experience a crash in condominium unit sales. In the same report, it was cited that a record number of condo units will be constructed in 2008. By 2009, economists estimated the second-highest record for condo unit construction. While the sales of existing homes will not experience an increase within the next two year, sales will remain moderately higher than previous years. Considering the status of the worldwide economy and the country’s previous record in housing sales, this is relatively high. In 2007, home resale in the greater Toronto area experienced a 10 percent increase from 2006 sales. While sales in 2008 were predicted to decline, it will only be slightly lower than the sales in 2006 (2008’s predicted 84,000 against 2006’s 84,842). The predicted sales for 2008 and 2009 are also still within the range of the sales in the last eight years.
Also, Canada Mortgage and Housing Corporation (CMHC) and the Scotia bank have released their forecasts for the Toronto’s real estate sector. According to their research, there will be a soft landing for real estate in Toronto. According to the CMHC report, there are a very low number of unoccupied condominium units in Toronto, ranging from 1,000 to 2,000 units only. Price growth, while not as high as in 2007, will remain moderate. Price growth for 2008 was predicted to be five percent, while price growth in 2009 was predicted to be three percent. Considering the status of real estate around the world, these are very good numbers. This means there is still an existing demand for property in Toronto despite the worldwide economic crisis.
Of course, this is not to say Canada is impervious to any negative effects of an economic crunch. However, as foreign investors say about Toronto’s real estate status, it is currently undervalued. However, with the situation now, these foreign investors may be correct in saying that it will only increase in value.
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