Last year, it was widely prediected that the Toronto real estate market would experience a "cool-off" or even a minor correction. First quarter has just wrapped up; so far in 2012, the hot Toronto market is showing no sign of letting up.
In the past February, the average selling price of homes in Toronto have climbed another 11% compared to February 2011, and broke past the $500,000 mark. No doubt, the market continues to be assisted by the low interest conditions.
While many observers argue that the Toronto market must cool off because affordability is declining and residents' incomes simply aren't growing as quickly, our view is that such opinions fail to take into account the large amounts of foreign investments that get put into our housing market each year. Nor do such views take into account the large number of immigration (often with large amounts of capital). Anecdotally, many real estate agents also report hat many current buyers are either foreign investors or new immigrants. When we take these factors into account, it's easy to explain the real estate market's hot streak in Toronto.
You can read our own predictions of the Toronto real estate market in 2012.