Welcome to the Toronto housing market in 2024! Whether you’re a seasoned investor or just starting, this Toronto real estate guide breaks down everything you need to know.
We’ll look at important Toronto housing market data, check out the City of Toronto’s new housing focus, and break down Toronto rents and Toronto real estate prices. Let’s begin!
Toronto's Population Shifts: Spotlight on Rental Trends
According to the 2021 Canada Census, there are about 2.8 million people living in Toronto with 2.4 people per house. Nearly half, or 47%, of Toronto’s population consists of renters.
Toronto Population
2,794,456
Housing Units
1,160,890
Household Size
2.4
Renters
47%
Lately, the City of Toronto is placing a greater emphasis on rental affordability over purchasing affordability, since it’s a more realistic gap to close.
Because of this, we anticipate the percentage of renters in Toronto to continue growing, getting to a point more similar to other global cities in North America.
Toronto's Latest Housing Policy Direction: The Missing Middle
The Toronto housing market varies by area, leading to uneven Toronto population density.
Downtown Toronto condos are bustling with a growing and high population density, while Toronto houses experience lower density, and in many instances, a decline in Toronto population growth.
Recognizing this, the City of Toronto is actively working to address fix this. They want to create more balanced density across the Toronto housing market, with a focus on housing policy to increase units in low-rise homes across Toronto.
Here are some recent Toronto housing policy changes happening in Toronto:
- Toronto Secondary Suites (2000): You can now add at least one more unit in each house.
- Toronto Laneway Suites (2018-2019): If you’ve got a laneway, you can add a house in your backyard.
- Toronto Garden Suites (2022): As long as your backyard is big enough, you can add a house.
- Toronto Multiplexes (2023): You’re allowed to turn a house into at least 4 units.
- Toronto Rooming Houses (2024): Having rooming houses in each Toronto home will be allowed starting April 2024.
- Toronto Major Streets Project (2024): You may be allowed to convert each house into 30 units or townhouses in 2024.
Toronto Rents and the Impact of Interest Rates
Rent yields (we can them “cap rates” in real estate) and interest rates are historically linked. When rates go up, rents usually follow suit.
In 2023, Toronto rents spiked due to rising interest rates, but they’ve since stabilized as rates leveled off.
Even if rates drop in 2024, we expect Toronto rents to remain steady.
This is because significant interest rate decreases aren’t likely, and the demand for rentals in Toronto, fuelled by high immigration and limited supply, is likely to support rents.
Toronto Real estate Price History
Even though Toronto real estate prices took a dip in the last year and a half, the overall long-term trends still look good.
In the past 20 years, Toronto real estate prices have grown by about 7.4% per year.
Toronto Housing Market Outlook For 2024
In 2024, three key factors are going for the Toronto housing market.
More People, Fewer Houses: In 2022, Toronto got more people (2.1% growth) than it got new houses (1.6% growth). Canada wants lots of people to move in, and many choose Toronto. This is a big deal for the way houses are bought and sold in the city.
Declining Interest Rates: It looks like interest rates might go down a bit. For the Toronto housing market, this means there’s more space for home prices to go up a bit. Unlike rents, where high rates can make things expensive, lower rates usually make buying a home more affordable. So, with rates expected to drop, it’s a good sign for Toronto’s real estate investors to enter the market.
Better Housing Rules: If you’re up for building more homes, improving changes to Toronto housing policy are on your side. This isn’t just good for making more money on projects, but it’s also getting more people interested in the Toronto housing market, which could make property values go up even more.
Toronto Housing Market: A Complete Picture
To sum it up, all three parts of the Toronto real estate investing equation is looking up for 2024:
Steady Rents and Lower Interest Rates Can Mean Better Cash Flows: When rents stay steady and interest rates go down, it can mean more cash flow for you. This is good news for investors looking to make the most of their real estate investments.
Lower Interest Rates And Tight Housing Fundamentals Can Mean Strength In the Toronto Housing Market: Lower interest rates in 2024, along with strong housing demand and low supply growth, could lead to higher Toronto real estate prices throughout 2024.
Improving Toronto Housing Policies Mean More Value-Add Opportunities: Positive changes in Toronto housing policies not only make for a more balanced Toronto real estate market but increase the number of value-add opportunities in Toronto. Toronto real estate investors can benefit from a friendlier set of investing rules, further boosting returns in their real estate investing portfolios.
How Do Toronto Real Estate Investment Rents & Cash Flows Look Like in 2024?
Let’s dive a bit deeper into the cash flows for a starter Toronto triplex project in January 2024:
Actual returns may vary depending on assumptions. Read our definitions and assumptions.
How We Can Help
If you’re ready to explore the best opportunities in today’s Toronto housing market, we’ve got your back.
We’re not your typical Toronto real estate sales brokerage. Instead, we focus on using numbers to make better real estate decisions in Toronto.
That can mean looking for stronger investments with positive cash flow, thinking about risk management, and looking for ways to boost returns like value-add renovations and gentrifying areas.
If you want to discuss your private real estate situation with us, just book a call with us by hitting the button below!
