Untrammelled residential price growth in Toronto is eroding locals’ confidence in their prospects of home ownership, according to the latest Zillow and Ipsos survey.
In 2019, as much as 77% of would-be home buyers in Toronto expressed doubt in being able to afford their desired homes. The proportion increased by 4% from the 2018 level.
Among sellers, the share of those who are concerned about their ability to afford the homes they want was at 68%, noticeably higher than the 55% in 2018.
The survey also found that the most significant roadblocks for Torontonians are saving for a down payment (66% of respondents), elevated monthly costs (61%), mortgage qualification (56%), debt (49%), and uncertain job security (44%).
These hindrances have not dulled the lustre of residential property as an investment vehicle, however: fully 83% of Torontonians still place a premium on home ownership as a good investment, up from 79% in 2018. This was considerably higher than the national average of 76%.
Indeed, multi-family assets remain among the city’s highest performing segments. Multi-residential investment volume in Toronto saw a dramatic 265% increase from Q3 2019 to Q4 2019, according to a recent Avison Young market analysis.
Toronto’s multi-residential investment totalled $2.1 billion in trades during the fourth quarter alone – accounting for more than half of the $3.8 billion in overall multi-residential sales last year.
“Low vacancy, strong population growth, limited supply, and rental upside upon tenant turnover mean investor demand remains voracious, resulting in the lowest yields of any asset class,” Avison Young explained.