For the past month articles like the one below have circulated blaming “Investors” for the increasing prices of homes in the GTA.
This couldn’t be further from the truth, we are seeing a run up because people are capitalizing on pre approved mortgages with rates that were locked in prior to the recent increases. I had mentioned this three weeks ago and noted that it will likely have a short term run up on prices, exactly what we are seeing right now:
In the last month and a half I’ve sold 3 detached homes (1 off market), purchased 1 detached, and 1 condominium. All transactions were completed by end users, not investors, except the condominium. Talking to other active agents in resale or preconstruction, everyone is seeing the same thing, overwhelming end user demand.
“Investors” look for opportunities to force appreciation in the short and long term, the current market is made up of end users trying to find a home, this is not a market any rational investor would compete in. The value and future appreciation are priced in, and realistically how many “Investors” want to buy standard cookie cutter detached homes that have had a 50% price run up year over year? None, they are all looking at different asset classes and properties that are not appealing to a typical end user.
The article classified “Investors” as “Multi Property Owners”, I find that misleading, but it certainly helps the narrative. If someone buys a home first and sells their home after while using a bridge loan while owning both properties (common), are they “Investors”, what’s the time cut off? What about when first time home buyers purchase a home and need a parent to co sign and be on title for them to close on financing (a growing trend)? Is the co signing parent now an “Investor” as well because they are on title of two properties?
Clickbait.
