Is Investing in Toronto Real Estate Still Worth it in 2023?

One of the best ways to build strong and sustainable wealth over time is by investing in real estate. And one of the most common ways to invest in the market is to buy and hold. While you own the property, you can collect rent from tenants who would essentially be paying your mortgage for you.

But given the sky-high prices of real estate in Toronto and surrounding areas these days, many would-be investors might be wondering if it’s even doable to invest in the city. You would have to charge a hefty rent price to just break even with your mortgage payments and other costs.

So, is it worth it to consider?

Cost To Buy a Home In Toronto

According to the MLS Home Price Index, the average sales price for a home in the GTA was $1,153,269 in April. Despite the fact that this is actually a 7.8% decrease from the same month in 2022, it’s still a big price nonetheless. Notably, the average sales price increased from March.

The demand for housing has increased over recent months, causing housing prices to increase, despite a lull for a while during the pandemic and the spike in mortgage interest rates. But renewed interest among homebuyers has sparked again, which has caused upward pressure on home prices and squeezed housing inventory, ultimately leading to a housing affordability crisis.

Given this scenario, is it a good idea to buy an expensive property? And if so, can the rent you charge offset your expenses?

Investing In Toronto Is Still Profitable

Toronto has long been a well-recognized and world-class city across the globe. Owning real estate in Toronto will surely bring in wealth over time, as the value will likely be maintained for the long run.

When done right, investing in Toronto real estate can be very profitable. For instance, the average price for a home in the GTA in 2013 was $497,073. It’s now more than double that price. Imagine how much equity you would have accumulated if you had bought a home just a decade earlier! And that’s not including the rent that you would have been collecting over the years.

Massive equity gains like this is why the Toronto housing market is still one of the best places in the country to invest.

With the continued influx of immigrants, the demand for rentals will continue to remain high, despite the high rent prices being charged by landlords. But they’re not the only ones who seek rentals.

Toronto traditionally has a very strong pool of qualified tenants. This includes transient professionals that may be seeking temporary housing while working in the city. They earn a high income, making it easy for them to afford the high rent landlords need to collect to cover the high cost of ownership.

Many high-paying companies are headquartered in Toronto, with the likes of Microsoft and Google calling the Ontario capital home for some of its branches. And many of its employees look for both long- and short-term rentals and are able to afford the high rent prices in Toronto.

Ultimately, if you can afford to buy real estate in Toronto, then it’s certainly worth considering investing in this cosmopolitan city. The Toronto real estate market has shown more stability than other investment options, like the stock market. As has been the case for a long time, owning real estate is a solid way to hedge against inflation and economic turmoil, especially if you have reliable tenants and your rent payments cover all required expenses.

If you’re looking for a property to purchase for investment purposes, we can help. Get in touch with the professionals at The Lotus Group today.