The housing market in Toronto has seen a relative slowdown following a non-resident tax applied to foreign buyers last year. A recent real estate forecast on HuffPost predicts a different catalyst will go on to reduce real estate availability in this megacity: The tech boom.
It only makes sense. With Toronto’s attractiveness on the world stage, its pool of talented workers and its influx of tech companies claiming sections of downtown, there has already been a “huge effect” on the real estate market.
Between 2012 and 2017, Toronto added approximately 82,000 tech jobs which is more than most cities in North America, including Silicon Valley. Toronto is now ranked by CBRE as “fourth most important tech hub in North America” whereas two years ago, Toronto was 12th.
That CBRE placement is not the most recent, and experts are calling for Toronto’s spot on the tech map to only advance further.
Last month, Microsoft announced their plans for a new Canadian HQ in Toronto’s core while Intel announced a new computer chip engineering plant in North York earlier this month.
The success of tech-savvy Toronto means Toronto’s housing stock is becoming more scarce than it already is, while prices will only reflect this scarcity.
Toronto has begun to be seen as an “elite group of North American cities where tech talent and capital has concentrated – and where real estate prices have shot through the roof” says HuffPost.
“Toronto is on the same uphill trajectory (and growing fast) as other North American tech markets like Seattle, San Francisco and Washington, D.C. These real estate markets have boomed and are continuing to grow.”
Real estate experts call the current “slowdown” a “speedbump” when it comes to the real estate market in Toronto. It’s expected to rebound upward when tech employment hits its next stride.
“The average resale price of a home in Toronto jumped by some 80 per cent in just four years from 2013 to 2017, rising to more than $920,000 at its peak last year. It has since fallen to around $765,000, but rising mortgage rates mean home affordability in the city remains at 25-year-lows.’
First-time buyers spying on the condo market have not seen price-relief in quite some time. According to HuffPost, the average condo price is up 5.4% over this year while costs are peaking at around $561,000.
Average rental rates on one-bedroom apartments have soared up nearly 15% over the same time period, according to Paddmapper.com.