Buyer Beware: Harsh New Reality for Toronto Real Estate
Half of recently delivered condos of Toronto Real Estate were bought by number of investors, and about half of them are losing huge money.
Recently, housing market of Greater Toronto had been a fairy tale. Years of price growth convinced number of buyers to buy condo/apartment into real estate market at any price. A Book on Real Estate Market in Toronto is available to know about investment in Toronto.
In an essence, a condo/house in Toronto had become a huge miracle investment, no matter that what has happened. Now, with home sales in metro area down by around 40% as comparative to the last year, and prices were down by 14% at that time, market is doing something as this hasn’t done in 3 decades: It’s just creating number of losers.
Toronto Real Estate Star said that recently a group of home buyers of pre-sale homes in Oakville made huge down payments in February 2017 and are stuck now with bill for homes as they can’t afford. You can also go through Real Estate Market Bulletin to know Downtown Toronto Condo Report.
All of their current homes can’t be sold out for amount that they have expected last year. New government mortgage stress tests taking in place, and lenders are re-assessing value of GTA properties, as they all can’t get mortgages to cover full amount. Investors fear that they may be sued by home developer i.e Mattamy Homes.
They are not the single to face huge financial pressure from slowing housing market in Toronto Real Estate. According to Urbanation, a real estate consultancy, number of condo investors of city are losing money.
Study also found that about half of the condos have been delivered in year 2017 at 48% which were bought by the investors. Home Sales in Toronto also plunged by 35% in February 2018.
And about 44% have some “negative cash flow,” which means rental income is not covering up the cost of ownership, like condo fees and mortgage. And more than third of all these losing money are more than around $1,000 a month.