Ever wondered what Toronto’s real estate market is like? As most realtors will tell you, volatility is the necessary evil investors have to endure.
Soaring property prices, a sudden drop in sales, and housing crash predictions are all eventualities, some of which happen, like in early 2017 when real estate prices shot up by over 30%. Others just never seem to come about, like the long-predicted housing crash in the real estate markets in Canada.
Nonetheless, buyer confidence has remained solid, fueled by factors like high rates of employment, rising income levels, GDP growth, lower interest rates, and an increasing population, all of which contribute to the demand for property in Toronto.
Because it’s probably one of the biggest investments or financial decisions you will make- on account of the rather large down payment, land transfer taxes, and possible long-term mortgage payments involved, our goal is to furnish you with more than just your gut feeling and what you already know so as to enable you to get the best bang for your buck within the Toronto real estate property market.
What to Consider About the Best Place to Buy a House in Toronto
As expected, there are a number of things you will want to look out for as a real estate property investor just to ensure you are making the right decision as far as selecting the best places to invest in real estate in Toronto goes.
Top on the list is the availability of great schools and institutions of higher learning, both public and private. Transportation is also another important factor when it comes to Canadian real estate. That includes closeness to subway stations, availability of streetcars and buses, and so on. Not to forget shopping amenities and the types of other real estate investments you would love to make.
Fortunately, all those are part of the elements we incorporated into our selection formula. We even went further and examined their value by taking into consideration average property prices shared by the Toronto Real Estate Board (TREB). We compared the prices to nearby areas, then looked at their history to see whether they have been appreciating, depreciating, or remaining stable.
In the end, we were able to identify many pocket neighbourhoods and communities that checkmark all the important aspects real estate property investors love to see.
Almost all of them are areas we love to invest in. Our list below covers Toronto only, and, as we found out, rental properties in Toronto are in high demand in these areas and the Greater Toronto Area (GTA).
The Best Places to Invest in Real Estate in Toronto
Yonge And Sheppard
Yonge and Sheppard may seem like suburbia, but don’t let that notion trick you into ignoring this cottage country-like neighbourhood. At the moment, it’s one of the hottest North York addresses for rental properties (both condos and houses) and among the places that are experiencing rapid investment property development, with no sign of the trend slowing down.
Because it sits far north, prices are still competitive, but with an increasing population and rising demand for income property, chances are it will be a hot spot soon. The average value of an entry-level house is $1 million while condos go for about $400,000.
Last year, North York condo prices went up, a sign that the area is slowly becoming an attraction for both investors and home buyers.
What’s more, the area is accessible to the Toronto Transit Commission (TTC) with the Sheppard Subway within easy reach of the residents. The ride downtown to the Dundas station takes about 25 minutes via the subway.
Liberty Village is an artsy neighbourhood located south of King Street West. Among the things that make it a great place to invest is its location, as it is a few minutes walk from the entertainment and fashion gallery of King St. West.
Accessing the financial core also takes a few minutes, thanks to the streetcars. In the past few years, the area has been popular with renters looking for an affordable area to act as their primary residence, mainly because of its vibrant community and its access to a variety of public amenities. Currently, the average condo fees within the real estate market are $400,000.
Above all that, Liberty Village offers a place to work, live, and play with over 20 restaurants, and it being home to various successful art and design studios.
Hip and trendy is the perfect way to describe King West, a neighbourhood that was just years ago (pre-construction) a district lined with abandoned warehouses and other properties.
Located in downtown Toronto, the area is popular with young professionals in search of the urban lifestyle, which it offers in abundance, thanks to having one of the most active nightclubs and bar scenes in Toronto.
King West offers a large variety of residential options to invest in, with condos fast becoming the most attractive property type.
Being one of the city’s largest and busiest transit routes, the area has benefited from commuters who wish to be closer to Toronto.
The new streetcars that got introduced not too long ago have made transportation way easier for those who rely on them.
Its location, new properties, and relatively affordable investment options make it a good choice for real estate and commercial property development. Note that the average price for an entry-level condo is $500,000.
Yonge And Eglinton
Investing in the condo market has for long been a reserve of downtown Toronto, but now we have pocket neighbourhoods outside downtown yet within the city that boasts of the same features and benefits downtown has. Yonge and Eglinton are one of them.
Things like great transit, high real estate investment prices, great infrastructure, and the potential for a future rise in property prices are just as strong in Yonge and Eglinton as they are in the downtown area.
One of the things making Yonge and Eglinton receive more attention is the ongoing construction of the Eglinton Crosstown Light Rail Transit (ECLRT), due in 2031. Most of it will be underground, and it will improve accessibility to Toronto city.
That aside, the place is popular with young families, a situation enabled by the presence of the best schools in Toronto, the best restaurants in the city, and the upcoming offices that signal potential for more jobs.
Expect mixed real estate investments mainly in houses, but lately, this includes many condos too. In the past few years, resale prices for some condo buildings around Yonge and Eglinton have been strong. The investment properties rank fairly well, with the average price for an entry-level house currently at $1.3 million and $500,000 for condos.
Yorkville is located north of Bloor Street and to the west of Yonge Street. It has one of Canada’s most exclusive shopping districts within it, in addition to upscale restaurants and top-class hotels.
The area is not only famous for its upscale boutiques like Burberry and Bulgari and luxury hotels, like the InterContinental, but it also has offices for international companies like IBM and Twentieth Century Fox.
It’s, therefore, not surprising that the average price for an entry-level condo is $740,000. Nonetheless, Yorkville is a prestigious address where investment will definitely yield high returns.
Located west of Bathurst Street, CityPlace is home to the canoe landing park. Its location (Downtown Toronto) is considered one of its finest assets, given that it’s just a few minute’s walks away from Toronto’s financial district- meaning you can access it at pretty much anytime during the day.
Over the years, this district has been one of the fastest growing and maturing, marked by an increasing population and an influx of merchants and services. Now the area is experiencing a boom in development, a situation likely to set it up as a prime residential area in Toronto when completed.
Being nestled between the Gardiner Expressway and Union Station makes it a very accessible area. It is also very close to King Street West and Liberty Village, making it popular with renters who need to commute daily to Toronto’s financial district.
Price-wise, the average entry cost for a condo investment is $400,000. Given that the neighbourhood is experiencing rapid growth and moving away from its old reputation, there are plenty of reasons to invest there now.
Bay St. Line
Bay St. Line is a popular neighbourhood located in the financial district. Its location makes it a hot rental area popular with those who work in the financial district and on the discovery of the district’s nearby hospitals and schools.
Ryerson University and the University of Toronto are located close by, making the place a living area of choice for a large number of faculty and students. Also, its close proximity to Bay Street, which is considered the center of Canada’s financial sector, makes it a prime neighbourhood to invest in.
Considering its location and accessibility, the average value of an entry-level condo is what you would find in most places with the same qualities, i.e., $500,000.
Leslieville And The Beaches
These communities sit along Queen Street’s eastern stretch. Initially, Leslieville mainly comprised a working-class population, but it has since grown to include people of mixed incomes. Restaurants, gourmet coffee houses, and art galleries are more common than ever.
The Beaches, on the other hand, remain an attraction partly because of the unencumbered access it offers to Lake Ontario.
Both areas are served by great schools and universities and are rife with restaurants and shops, especially in Queen Street East, which is basically the most loved shopping district in the area.
The majority of properties are cottages, rowhouses, Victorian houses, bungalows, detached and semi-detached houses, and lately, some condos as well. The prices are still low to medium while the investment is mid to high. The average price for an entry-level house is $1.2 million, while condos go for $550,000.
Because these neighbourhoods have undergone plenty of gentrification and revitalization in recent years, there’s new interest in Leslieville East, which sits between the two communities. It’s an up-and-coming neighbourhood, and the price of its properties is still low, making it a suitable option for anyone who doesn’t mind putting up with developing places with huge potential.
Yonge St. Line
Yonge Street is famous for many things, one of them being that it’s among the longest streets in the world. If you are looking for office and residential areas to invest in, the area is rife with them.
Its biggest selling point is its great public transit system, served by the eastern half of Line 1 Yonge-University subway.
There’s also a supplementary bus route running along the street and an additional blue line route that works after the subway closes.
One reason the area is popular with renters is because of its ease with the subway and its efficient public transit system. Expect to find the average price for an entry-level condo at around $500,000.
Queens Quay, a notable street in the Harborfront neighbourhood of Toronto, has been experiencing a revitalization for the past decade. The street was largely commercial due to its piers, but huge parts of it have been rebuilt into premium waterfront property.
Today, the neighbourhood has a variety of parks, entertainment facilities, and office spaces for rent.
It is served by two streetcar lines and various bus routes, making it easier for the residents to commute. The investment price is premium, considering it has amazing waterfront property. At the moment, the average entry price for a condo is $460,000.
Considering its beautiful parks, water views, and serene atmosphere, the price sounds well justified.
Downtown Toronto is home to The Annex as well. Bordering the University of Toronto, the place is mainly a residential area.
Here, you will encounter plenty of Torontonian-style houses that were popular among the elite in the nineteenth century. The area is well served by public transit, including the bus service and four TTC subway stations.
Because it’s a residential area, the buildings are mostly mansions with a few condos. The average price for an entry-level house is $1.2 million.
Generally, the area is rich in historical value, and it is well located with an efficient transport system, making it a great neighbourhood to invest in.
Danforth lies further north and even though it’s outside the core, it still provides easy accessibility to the city. In addition to having a strong history, the area sets itself apart due to its strong landscape and abundance of amenities.
Other attractions include plenty of health and wellness establishments, walkability, and lots of parking space. Even though the area is off the main subway line, it still provides easy access to the TTC using streetcars.
As with most of the best markets in the GTA, mid-rise condo developments have been popping up not just along Danforth but also around the Village area. Moreover, plenty of homes have undergone renovation, especially in Danforth Village, and they are being sold at a good price. The average price for an entry-level house begins at $900,000.
FAQs About The Best Places To Invest In Toronto Real Estate
Is it Worth Investing in Toronto Real Estate?
The prices of homes and condos in the Toronto area have been going up for years. From August 2019 to August 2020, the MLS Home Price Index showed that the average home price has gone up by 11.1%. Home prices continue to rise in the area, and most experts believe this pattern will continue for a considerable amount of time.
What does this mean for investing? As prices go up, there will be some renters that look to buy real estate sooner rather than later. Other would-be homebuyers will decide to rent rather than buy so they can save more money to buy down the line.
Investing now means two things. First, you can find renters who cannot find affordable houses; you will begin to make back your money almost immediately if you set the right rental rates. Second, there is a great chance that you will be able to sell the property at a higher purchase price because the prices in the area have been consistently rising.
For those reasons, investing in Toronto just makes sense.
Where Can I Invest in Real Estate in Toronto?
At the end of the day, you can invest anywhere in Toronto as long as you choose the right property and research the area. Toronto has many great areas. Some areas are already being invested in; other areas are just starting to pick up.
The key is that you know what you are getting into. Do you know the market? Do you know what kind of renter you hope to attract? Can you price the unit in the right way to make a good profit? Are you prepared to renovate and market as needed?
The list of areas of Toronto in this article is a great place to start as these neighbourhoods are proven to entail a prolific number of great investment properties but they are not the only areas you can consider.
Are Condos a Good Investment in Toronto?
Absolutely! Condos are often considered to be one of the best real estate investment options in Toronto. There are many condos available on the market, which can seem like a problem. However, this actually means you can usually find competitive prices.
Additionally, condominiums are often the first choice of renters who want to find a great home in the area but aren’t ready to purchase something yet. This means that filling your units isn’t difficult.
If you decide to get out of the rental business down the line, condos are likely to sell quickly to either families or other investors. The risk of this investment is manageable, and many real estate investors find Toronto condos to be their favourite investment option.
Should I Invest in a Condo or House in Toronto?
The final decision about which type of property to invest in is your decision, but most real estate investors will agree that investing in a condo makes more sense than a house when working in Toronto.
Single-family detached homes in Toronto are often priced at over $1 million, according to Canada’s Mortgage and Housing Corporation. Condos usually fall in the range of $400,000 to $600,000, depending on the neighbourhood and condition. This makes it a much more practical investment when you think about your long-term ROI.
For some investors with more free cash, however, investing in a single-family home that needs work and turning it into a dream home can also make big profits. Ultimately, the choice will depend on your goals for the property and how much flexible money you have to invest.
How Much Money Do You Need to Buy a Condo in Toronto?
In the areas we covered today, most condos would be priced between $400,000 and $600,000. However, that doesn’t mean you won’t find condos above or below this purchase price!
Condos that need serious repair will be lower; condos that are ready-to-rent could well go higher. Between your cash flow and available loans, you should expect to need around $200,000 to $300,000 minimum if you are ready to put in some renovation work.
How Do I Invest in a Condo in the Toronto Real Estate Market?
To get started on the process of finding the perfect investment property in Toronto, the best place to start is to connect with an experienced Toronto property management consulting firm.
Such a company can assist you in sorting out your goals, cash flow and any other real estate investments you may want to undertake by providing crucial advice in regards to any queries you may have in relation to the legal rigmarole involved, as well as in regards to any relevant property management costs that may be applicable.
From there, they can advise you on what type of properties might be the right choice, and your real estate investing North America adventure will begin!
It’s important to mention that we left out a couple of areas that are just as good as those we’ve looked at in detail. Examples include St. Lawrence market area & Distillery District, Little Italy, Roncesvalles, Cabbagetown, Corktown, just to name but a few. Generally, Toronto has way too many awesome commercial and residential properties to invest in.
As an investor, you have plenty of areas to choose from, each with its own unique attributes. If you are stuck at making a selection or just not sure where to buy a house in Toronto, you can always enlist the help of a property management company, preferably one based in the city.
With their investment property advice and other forms of assistance, you stand a better chance of not only finding the best places to invest in real estate in Toronto, but also navigating all the procedures involved in making your dream investment come true and adequately managing your: property management fees, initial down payment, cash flow, and any other rental properties straight from the get-go.