It is heatedly discussed that Is now a good time to buy a house in Toronto.
Is now a good time to buy a house in Toronto? The combination of the value of the land and house itself
House prices are a combination of the value of the land and that of the house itself. Data from Statistics Canada shows that the cost of building materials has skyrocketed since August 2020. The prolonged stay-at-home orders have meant that many property owners are renovating their homes, and this trend has driven up the price of wood, stone, piping, electrical wiring and other building materials. According to CBC News, the price of 2X4 lumber rose to $1,400 per square foot as of May 2021, up from $550 per square foot before the pandemic. North American construction material production also has been continuously impacted by the pandemic, and shortages of lumber and building materials have become a regular occurrence. This added to people’s wild rush to buy, has industry insiders stating that North American building materials market prices are not likely to return to normal levels until 2023.
Is now a good time to buy a house in Toronto? the value of land
Another of the most important factors in determining housing prices is the value of land, and this value is determined by the level of availability. CMHC points out that currently there is still rapid population growth in the high-density residential areas of Toronto. In other words, land should be utilized to a greater extent, which reflects the scarcity of land in Toronto. Data from MPAC, the home valuation department, shows that nearly 70% of Toronto’s home prices are made up of land prices. The closer it is to the downtown area, the greater the percentage of land in the price of housing, and in turn, the higher the price of the housing.
So, if you consider these two points, you can properly answer the question: ‘Is now a good time to invest in Toronto real estate?’ And the answer is ‘Yes’. While the value of both land and building materials are increasing, it is a good idea to buy a home in Ontario as soon as possible, with little likelihood of house prices dropping in the near future.
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