Five years ago, Tehmeema Safdar and her family had high hopes of settling down in Toronto, Ontario. However, the dream of owning a home in the city has slowly faded, as soaring prices made it increasingly unattainable. As more and more investors flock to the market, the average selling price for homes in the Greater Toronto Area has risen by 19.3% year-over-year, according to the Toronto Regional Real Estate Board.
Safdar's story is not an isolated case—it reflects a growing reality for families and first-time buyers in Toronto. Recent data reveals that investors who own multiple properties now make up over 25% of buyers in the province. This shift is not only driving up prices but also creating difficulties for individuals trying to compete in bidding wars.
"It's ruthless," says Jermaine L. Murray, who is searching for a home for his mother and sister with special needs. Despite working two jobs, Murray finds it challenging to enter the market due to fierce competition from investors with deeper pockets.
Experts warn that this trend could have far-reaching implications, not just economically but also for the overall makeup of big cities like Toronto. John Pasalis, President at Realosophy Realty, explains that investors can exacerbate market fluctuations, pushing prices higher during economic upswings and then exiting the market during downturns. This cycle leaves the housing market vulnerable and potentially leads to price deterioration.
While some argue for increased housing supply to cool the market, Pasalis points out that it may only attract more investors. "When investors are the biggest segment of your buyer base, no amount of supply is enough," he states.
The situation is causing despair among families striving to purchase homes in Ontario. Ron Butler, a mortgage broker and one of the founders of Butler Mortgage, emphasizes the need for intervention from all levels of government to rein in investor behavior before it's too late.
If forced to move again, Tehmeema Safdar and her family have decided to leave the city for good. For them, it's not just about the numbers—it's about finding a community they can truly call home and providing stability for their children.
Image: Tehmeena Safdar and her family moved to Toronto from Edmonton in 2016 because of her husband's work. They've been unable to get into the real estate market and have rented ever since.
Image: Jermaine L. Murray is trying to get into the market for the first time to buy a home for his mother and sister with special needs.
Image: This graph taken from Teranet's quarterly Market Insight Report breaks down buyers by segment. Multi-property buyers are orange, while first-time buyers are red. Life events (in blue) are instances where there is a transfer of ownership between people who are related, due to things like death, marriage or divorce. Over the past decade, multi-property owners have gone from the smallest segment to the largest.
Image: John Pasalis is the president of Realosophy Realty Inc. and a housing analyst. He says the increased percentage of investors in the market has driven prices up, making it harder for first-time buyers to get into the market.
Image: Ron Butler is a mortgage broker and one of the founders of Butler Mortgage. He believes the current trend of investors now making up more than 25% of transactions in Ontario is a concerning trend.