Brian O'Donoghue

Sales Representative

Direct 647-405-3126 | bodonoghue@bosleyrealestate.com

Investors who own multiple properties within the city has in recent years overtaken first-time homebuyers as the biggest slice of Toronto’s home-purchasing market, according to a recent report by Teranet.


As recently as 2016, Teranet — Ontario’s title search and registration provider, found the most common kind of person purchasing a Toronto home was a first-time buyer. But from 2016 to 2018, things changed. Multiple-home owners — a group that includes real estate investors as well as those who own a vacation home like a cottage — became the most common kind of homebuyer throughout the city. This year, between January and August, Teranet found that multiple property owners made up 29 percent of Toronto purchases, nudging first-time buyers at 28.5 percent.


And across the country, Equifax Canada has noted a multi-year surge in people with more than three mortgages, with a 7.7 percent increase between June 2020 and June 2021.


While some believe investors are taking away supply from prospective homeowners looking for their primary residence, others say they have the potential to provide needed rental supply. Experts say the exact degree to which investors have affected that growth is unclear. John Pasalis, president of Realosophy Realty, presented it as a sort of chicken-or-egg question: did the surge in investors lead to rising home prices, or did rising prices attract more investors?


Either way, he sees the increase in multi-home ownership as yet another challenge facing hopeful buyers searching for their own home, particularly in the competitive single-family house sphere. Pasalis noted that investors were often attracted to average or below-average homes where they saw potential to increase the property’s value. With more capital at their disposal, Pasalis said investors could often be more aggressive in bidding wars.


As of the last census report, slightly more than half of Toronto households owned their homes — 53 percent versus the 47 percent who rented. Of homeowners, 61 percent lived in single-detached, semi-detached, or row houses, while 87 percent of renters were in apartments.


He believes there’s more to the equation, though, noting some older properties are in a state where they require extensive renovations to be in livable shape. Not everyone has the time or money to do those kinds of renovations, he said, particularly someone who barely eked out a down payment.

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September marked the transition from the slower summer market to the busier fall market in the Greater Toronto Area (GTA). Every year, we generally see an uptick in sales, average selling price and listings after Labour Day, and September was no different. Sales increased relative to August, and in September, 9,046 sales were logged through MLS, making it the third-highest mark on record for the month of September. The 905 area of the GTA represented the majority of the sales, with 5,649 transactions.


The GTA suburbs are seeing prices rise much faster. For all home types, the average selling price was up 18.3% year-over-year to $1,136,280 in the GTA. The City of Toronto saw prices move in the same direction, but at a slower rate. The average sale price for the City of Toronto is $1,090,196 up 6.7% year-to-date.That would mean suburban price growth is significantly outpacing growth in the City of Toronto.


Detached property types within the 416 area are the priciest on the market, having grown 19.5 per cent annually in value to an average of $1,778,928.


On an annual basis, September sales were down 18 percent from 2020’s record-breaking levels. This is mostly due to the lower quantities of new listings, which TRREB says have dropped 34 percent year-over-year. Across the GTA, 13,483 new listings were added to the market last month, approximately 7,000 less from the 20,441 homes that came online during the same period last year. The majority of listings that became available in September were recorded in the 905 area, with 7,537 new properties. TRREB attributed a resurgence in the condo market as a factor behind the higher share of listings sold during September.


Jason Mercer, TRREB’s chief market analyst, pointed out that last month’s price growth was supported by the low-rise market segments, which include detached, semi-detached, and townhome properties.


“However, competition between buyers for condo apartments has picked up markedly over the past year, which has led to an acceleration in price growth over the past few months as first-time buyers re-entered the ownership market,” he said. “Look for this trend to continue.”

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