I am not a realtor, but with all the rich immigrants coming in, I don't see property price in Toronto come down anytime soon. Additionally, the current price in Toronto is a bit high, but not by too much. People have been predicting a collapse in Vancouver's real estate for how many years? It only got higher. Why Toronto would be different?
Toronto's housing price only increases modestly over the past 10 years (5-10% a year), unlike many US cities previously, or Vancouver. So those who expect a US type of price drop in the future can forget about it. Canadian banks are nowhere near the recklessness of their American counterparts in terms of approving mortgages to people who can't afford them.
Asian buyers are playing increasingly an important role. The rich Chinese are basically obsessed with house ownership/investing. They can do without buy nice cars, expensive dinners, going to movies and nice clothes, but the first thing they do after coming to Canada is buying houses. Some with cash if they are wealthy enough, and some save like hell for a down payment. Then they start thinking about investing and become landlords. This is exacerbated by the fact that many owners don't even live in Canada. $40,000-50,000 can buy you a nice three-bedroom house in Toronto, but only a 1000sf condo in Shanghai or Beijing; a $300,000 downtown condo can rent out for $1,500 (maybe 1000 after expenses) but a condo as expensive can rent out for $300 in Beijing and Shanghai, do the math. Houses in Toronto are basically deals to them. I haven't talked about the middle easters.
I personally think Toronto is over priced, but market doesn't clear itself very time there is a bubble, sometimes you have to wait for 10 years or more because many other factors come into play.Put overseas investment aside, the fundamentals here is pretty solid. If you like flexibility, fine, renting is a good idea and a lot cheaper. However, expecting the price to drop by any significant percentage so that you can come in and get a deal, it is nearly impossible in the foreseeable future.
If you do need a house, buy now instead of waiting, chances are in 5 years, the $400,000 house you think is not worth the price now will be asking for $500,000 or more, and you will still be sitting here expecting a price correction and cheap houses all over the market. If you don't believe me and still think I work for Re/Max, simply google and find 10 or 5 years ago what Torontonians thought how the market would be in the future, you would be surprised how similar the situation was. Housing is expensive in almost all major healthy cities, and people tend to complain and wishfully think some sort of meltdown is coming. You know what, even if price comes down by 20% tomorrow, there will still be tons of folks here complaining it is beyond reach and there is bubble.
Maybe a good leading indicator is vancouver. If the Vancouver's bubble doesn't burst, why should Toronto's much smaller one?
