Safe and fun are not two words you usually hear in the same sentence. Toronto is too polite to boast, but if it could, you would hear about its on-trend restaurants, a vibrant nightclub scene, its renowned annual film festival, and its accessible parks and waterfront. Right on Toronto’s doorstep are the picturesque lake districts of Muskoka and Georgian Bay, and the wine lover’s paradise of Niagara-on-the-Lake. Overseas property investors agree that Canada’s prudent banks and reputation for fiscal restraint offer comfort in an uncertain worldwide economic climate.

The Toronto property market has enjoyed an average five percent annual appreciation over the past 10 years. During the financial crisis of 2008/09, Toronto house prices dipped on average eight percent, took only six months to recover and were soon eclipsing their previous highs. Because Canada’s banks have always maintained stringent lending criteria, the country did not experience the heart-stopping boom and bust price action suffered by other G8 nations.

This resilient performance placed Toronto firmly on the international map. Overseas investors are accumulating Canadian assets in record amounts. Luxury hotel chains and international property developers are jostling for a presence in Toronto, which coincides nicely with burgeoning demand from foreign buyers.

Solid returns
International demand is strong and vacancy rates are low. From an overseas investor’s perspective, one can secure a 550ft2 condominium apartment for CAD $320,000 in a development located right in the downtown core. Amenities include a rooftop infinity pool with adjacent bar/lounge area and a fully-equipped gym. Access to the adjoining hotel’s gourmet restaurants, housekeeping, room service, car wash and dog walker are available on a pay-per-use basis. This condo is a 15 minute walk to the financial district and a five minute drive to Toronto’s downtown lakeshore airport. Similar units let at CAD $1,600 per month which implies a 3.9 percent yield after deducting agents’ fees, annual property taxes and condo maintenance fees. With prices trading at the equivalent price of £365 per square foot for this calibre of property, one can see why Toronto is attracting interest from international investors.

A sharp increase in genuine relocations is also stoking demand. Canadian banks were in a strong position to cherry-pick the best talent during the 08/09 financial crisis and have continued to hire from abroad in the aftermath. Benefits to families in this law-abiding city include free medical care for residents of Canada, an abundance of green spaces (the Toronto islands are the largest carbon-free space in North America) and a top-tier education system. Toronto’s position on the Lake Ontario shoreline and its proximity and easy access to the lakes and ski areas of ‘cottage country’ also add to its appeal.

Affordable prices
It can be a challenge to decide where you want to live in a city you have yet to discover. A large assortment of neighbourhoods ensures that property in Toronto is within reach of most budgets. Victor Martin Real Estate Ltd., a Toronto brokerage that is dedicated to helping overseas buyers, compares London and Toronto neighbourhoods on its website to provide newcomers with some idea of what to expect. In the Greater Toronto Area (GTA), prices range from CAD $200,000 for a downtown studio condo to tens of millions for a huge pile in The Bridle Path. Even in prestigious Rosedale, prices per square foot for a very large family house with rolling lawns start at CAD $625.

Recent price trends are encouraging. Sales volumes of luxury homes have increased steadily since January 2010. Figures from the Toronto Real Estate Board (TREB) show that the average sale price of a residential property in Toronto increased roughly five percent between September 2009 and September 2010. Bill Johnston, TREB’s president says: “We remain on track for one of the best years in history for existing transactions in the GTA.” Although year on year prices are rising and current prices have exceeded 2007 levels, most homeowners are still within the affordability guidelines used by mortgage providers – they are spending no more than 32 percent of pre-tax income on mortgage payments, property taxes and utilities. TREB’s housing statistics and charts are available on www.victormartin.ca.

Steady growth
Toronto is one of the most culturally diverse cities in North America, welcoming 125,000 immigrants a year. The financial centre of Canada, it houses half of Canada’s largest financial institutions and 90 percent of its foreign banks. 40 percent of Canada’s largest industrial companies are based in Toronto, while the Toronto Stock Exchange is ranked sixth in the world for raising equity capital. The IMF predicts that Canada will lead economic growth among major industrialized countries in 2010 and 2011. Toronto’s combination of established neighbourhoods and innovative new condominium projects provides a multitude of choices for both investors and new residents. Its heavily-regulated real estate industry guarantees transparency and honesty while Canada’s strong economic footing and wealth of natural resources provide a solid foundation for investment. The rise and rise of Toronto has only just begun.

Louisa Martin, of Victor Martin Real Estate Ltd. is dedicated to helping overseas buyers invest in or relocate to the Toronto area. Previously, she worked in bond trading and sales in London for Citigroup, ABN AMRO, Societe Generale and Daiwa SMBC.

Email: louisa.martin@victormartin.ca; www.victormartin.ca