Opportunities for investors in the GTA will abound in 2015, as more homeowners in the area will list their houses for sale, creating a more balanced market, according to experts.
Speaking at CMHC’s Toronto Housing Outlook Conference yesterday, senior market analyst Dana Senagama said the GTA’s sales-to-listings ratio will be 55 per cent, though some markets will deviate. For instance, the Durham region, which includes Ajax, Oshawa and Whitby, will see a sales-to-listings ratio of around 75 per cent.
Senagama also highlighted more good news for investors: a strong demand for rental units. She pointed particularly to growing long-term investor activity around rental condominiums.
“If you’re making the decision to invest, you need to look at the rate of return,” she said. “Thus, look at cap rate, which has between four and 4.5 per cent in the last five years.”
It may be that investors are more motivated by capital gains, she added, since there is a stronger price appreciation (around 20 per cent) for new condos. “We’re seeing around a quarter of the total condo universe rented out by investors.”
Looking more widely across Ontario, Ted Tsiakopoulos, regional economist at CMHC, said the province’s rental market will continue to tighten – great news if you’re an investor.
“Nothing here suggests to me that prices are going to fall, that you should be rushing out to sell your real estate,” he said.
Residential real estate assets in the province have been historically stable, he added.
Bob Dugan, CMHC’s chief economist shared a Canada-wide outlook during the conference, forecasting slower growth in housing prices in 2015 and 2016. He added: “Price growth will drop below 2% in 2015 and 2016. Where we end up in that range depends on what happens with the economy.”
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