There’s been a lot of buzz around the real estate market in Canada over the last couple of years. With home prices soaring through the pandemic due to low-interest rates, readers are increasingly interested in real estate volatility as key markets enter a downturn.
However, the real estate market is about more than just home prices. The prospect of purchasing land in many places might be more attractive than buying a readily constructed home. If you have the money and/or skills to build a house, there are lots of options for you.
Ontario is a very large province, and although some of Canada’s most densely populated urban areas are found there, there is still a huge amount of relatively sparse land in the northern parts of the province.
Keep reading to see details on buying vacant land in Ontario, as well as information on some of the areas where you can find the cheapest land for sale in the province.
For city slickers who are used to renting or buying existing houses, the prospect of buying empty land might seem a bit overwhelming. After all, there is a huge and complex system of laws and necessities surrounding land development and acquisition.
The obvious reason to buy vacant crown land is to build housing for yourself. Building your own home gives you a lot of control over the quality of construction, as well as the aesthetic qualities of the space. However, it also increases many forms of risk.
Another reason somebody might buy vacant land is to develop some form of profit property. This could be a rental home for prospective tenants or even a unique business space like a racetrack or a paintball field.
At any rate, the decision to buy vacant crown land shouldn’t be made lightly. There are many aspects of legal, financial, and physical obligation that go hand-in-hand with purchasing and developing vacant crown land. Understanding these aspects is imperative to success.
Most people are aware of the popular real estate slogan: location, location, location. However, how important is location, really? Well, location is often even more important than you might realize when you are purchasing and developing crown land.
For starters, if you are building a home, you will want to be realistically within the range of necessary services and institutions. There’s no sense in moving out of the city if you just have to drive back and forth every day, especially with gas prices the way they are.
There are also legal problems that go along with location, such as zoning laws and regulations governing the installation of utilities or other necessities. Understanding these laws before investing in vacant land is of the utmost importance for new investors.
One of the main considerations of investing in property, especially condos/townhomes at Etobicoke, is the value of the land. You want a land appreciation. To improve your chances of achieving a good investment it is worth examining your surroundings and our company suggests asking a professional to assist with your decision-making.
What type of spruce you choose depends on the building project you want. Also, consider whether you can make a good foundation. Some places are zoned for specific purposes while others are not.
Utility costs are another consideration when investing in land in Ontario. If utilities are needed on your land, it may cost thousands of dollars depending on the area of your land and the proximity of the utilities.
There are a number of places in Ontario that strike a good balance between land cost, utility proximity, and other costs associated with land development. Here is a short list of some of the most affordable places in Ontario to buy land:
Housing prices are admittedly ridiculous in many parts of Canada, including Ontario. However, prices are starting to normalize as interest rates increase from the Bank of Canada.
Increased purchases and development on Ontario land have been encroaching on existing farmland, leaving farmers to find land elsewhere. As cities like Toronto get bigger and bigger, landowners in surrounding rural areas might see their property values increase.
This, of course, is not all good news for those people who own land for the production of food. However, if you are seeking to invest in cheap land around Ontario, it could indicate an incoming jump in the value of your land.
While highly populated areas in Southwestern Ontario remain in high demand, places in Northern Ontario such as Thunder Bay are becoming a more realistic investment, as their prices are not as high as some areas further south.
Even though the prices may be attractive, most of the land in Northern Ontario actually belongs to the Crown. This may complicate efforts to purchase land compared to privately owned land more common in Southern Ontario.
A report from the Ontario Real Estate Association (OREA) highlights the far-reaching foundational segregation and bigotry seen by the territory's real estate agents and their clients.
Canadian landowners of foreign descent are especially underrepresented in the Ontario real estate market, as confirmed by the Fighting Fair Housing report.
Despite a downturn in prices, the little Northern Ontario town of Smooth Rock Falls presented a motivation program in 2017 that would repay purchasers up to 90 percent of the worth of a city lot as long as they build a house in Smooth Rock Falls within two years.
Smooth Rock Falls itself is home to golf courses and other amenities that have become quite attractive for potential investors. Within a short period of time, thousands of responses were coming in from places as far away as Australia.
While this development is promising both for Smooth Rock Falls and its potential investors, many sales have not been completed and much of the reported land is apparently still available.
Farmland costs in Ontario went up by 22% last year, reports Homestead Credit Canada. It was the biggest average price increase in Canada and multiple times the increase just a year prior.
Among the elements driving farmland costs higher were low loan fees, statistically high incomes, and optimism from farmers. At the public level, farmland costs expanded by 8.3 percent last year regardless of a dry spell that harmed many crops.
While prices have been soaring throughout the pandemic, they have begun to fall again over the last few months. Highly contested metropolitan areas are showing strong support from inflated demand, but rural areas are seeing larger price decreases.
That being said, most real estate professionals are expecting real estate prices (including vacant land prices) to continue falling throughout the rest of 2022 and possibly well into 2023. This means that you might not see a return on investment for a number of years.
However, buyers may want to get in on the market while interest rates are still low, as the Bank of Canada is still poised to continue increasing rates in order to combat runaway inflation numbers reported so far in 2022.
If you’re in the market for land in Ontario, then there are a number of places outside of major cities and elsewhere that have some attractive prospects. However, it is important to consider all of the factors that go into the cost of land.
Between taxes, regulations, and utilities, the required investment to develop land in Ontario could be considerably higher than expected. For this reason, it is recommended to be cautious and thorough when considering buying land in Ontario.
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