"It's a sellers’ market in Toronto
right now so we're seeing a lot of investors looking to snap up property on valuable land to either renovate or do a complete rebuild altogether," said Andy MacEachern, a realtor with Keller Williams, who is working closely with five clients doing teardowns in areas across the city.
"The value of a home could go up as much as $700,000, especially if you add another level to the house, so there's a lot of opportunity this time of year."
Recent numbers from the City of Toronto
point to an influx of teardowns across the GTA, most notably in neighbourhoods such as South Etobicoke, Willowdale and areas in North York. According to city data, 375 teardowns were approved between January 1 and May 11 this year.
The numbers also come at a time when sales of homes in the GTA were up by 6.3 per cent year-over-year with 11,706 homes selling in May. With the low supply of homes and high prices, many investors are using teardowns as an option to find large lots where they can build new homes.
In Willowdale specifically, where small homes rest on large lots, the trend is taking off and is hugely popular, as 76 homes were approved by the City during the same timeframe.
As inventory in Toronto
does decrease, investors in the city and beyond are looking outside of the major trendy neighbourhoods for places they can grab for low and either flip or rent out, or sit on that property until it does appreciate.
Just recently, a $3.5-million home sold in Bedford Park after nine days on the market, a healthy sign for investors as the thirst for luxury homes, or “private castles” grows among high-income earners.
"Because of the shortage of homes, investors are all about profit potential," said MacEachern.
"There is a better potential for single-family home rentals today because the appreciation is not there with condos or other property prices. It's used as an inventory home so there's definitely opportunity there."
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It's not always the safest way to invest in Toronto's high-price market, but new numbers from the City of Toronto back up the trend as investors increasingly tear down small homes on large lots to turn profits.