As we discuss in our market report this month, 2014 was the second-busiest year in Toronto real estate history since records began, edged out only slightly by the banner year in 2007. Despite near-constant dire predictions in the media about the Toronto market's overvaluation and imminent slide, the market is, quite literally, nearly better than ever.
And so far this year, it looks like that trend is only going to continue.
Here are two reasons why:
1. Toronto is a world-class city, with world-class amenities, but is also an "affordable" alternative to more prominent investment centres like London and New York. In the same five years or so that Toronto has been taking its place on the world stage as a major player in the global economy, cities like NY and LON have seen a fair bit of unrest in terms of affordability of property for the people who live in those cities at the same time as a huge increase in investment in property by overseas or buy-to-rent landlords. There's a lot of money flowing into these cities in the short term, but in the long term, Toronto's real estate market is healthier - and the city itself is healthier - because it has a better balance between absentee and investment owners and owner-occupiers.
Which brings us to...
2. Toronto real estate is still affordable. Between low interest rates that seem to be staying low into the near future and the general health of the Canadian economy in general and the Toronto economy in particular, our real estate is still affordable for the average-income-earning family in the city. It's not an overheated market if the people in the market can afford to buy real estate: and considering that price growth this year was primarily due to a shortage of listings and a glut of buyers, that's exactly what's happening. As TREB President Paul Etherington says: "While home prices certainly increased substantially in 2014, the purchase of an average priced home remained affordable, in terms of the average household's ability to comfortably cover their monthly mortgage payments."