The cooling of the international property boom has, arguably, not arrived on Toronto’s doorstep. The Financial Post has tracked a further 22% rise in house prices year-on-year for November, noting that supply has all but vanished in the biggest city. The red-hot and inflated housing market is, therefore, here to stay. Making sense of this is important, both for home buyers and sellers, in order to extract the maximum amount of value from the market. A look at how the brokers and realtors in the market are helping is a good first stop.
Finding everyday value
With the inflationary nature of the market forcing homeowners to make savings elsewhere, it’s time for both buyers and sellers to start cutting around the edge when it comes to cost. The Globe and Mail have highlighted a slowing down in proptech innovation over the past year, partly in response to the failure of one big-name property service, yet there remains savings to be made by looking to use digital services that focus on an all-online property purchasing cycle. These often help by cutting costs in terms of the fees and commissions earned by other players in the property cycle, like the realtors and brokers. This is a good first to finding some value in a market that’s increasingly congested.
The key to finding a property that is presented at its actual value is in learning where the hotspots are for inflated prices. A review by Storey’s revealed the two biggest danger areas when it comes to value - detached properties, and condominium apartments. Even with price corrections, these properties would see the most rapid inflation back to their previous price tags. It’s important to stay away from these areas and instead focus on where the quality is. However, with the market rapidly shifting, it’s not always clear what that is.
The missing middle
According to the Toronto Sun, the brightest future lies in what they term as ‘the missing middle’. Referring to mixed-height, mixed-use townhouses and apartments on major boulevards, they offer a mid-point between standalone properties such as houses and the condos that mark mixed-use developments in the city centre and renovated land. The reason these properties are referred to as ‘missing’ is due to their status within the housing market - there are low numbers available, with tenants often happy to stay put. Building more of these houses, or renovating (Now Toronto estimates there are between 9,000 and 27,000 empty housing units in the city), a new and affordable market can be opened up. Sellers aren’t necessarily going to lose out, either, as the growth across the market has stayed strong.
In the meanwhile, buyers need to cement that pragmatic approach to the market. Don’t overspend on feeds and commissions, look for value in areas of the market by moving away from overpriced units like condos and detached properties, and perhaps be patient. The housing crisis is real, across every city in the developed world - more can be done by legislators to make change happen, and perhaps will be.