Where is the next hot spot for housing in the GTA?

A question I get asked regularly is: Where is the next hot spot for real estate in the Greater Toronto Area? Many predicted that COVID-19 would decimate downtown real estate, but that has clearly not been the case. According to data from rentals.ca and Bullpen Consulting’s latest National Rent Report, the average rent in Toronto is by nearly 25 per cent annually, with pockets of downtown Toronto seeing growth of more than 40 per cent from July 2021 to July 2022. If you’re looking to buy and rent, those are some attractive numbers.

f you are an investor looking at the condo market in the GTA, the downtown market and its $1,500 per-sq.-ft. (psf) to $1,700 psf pricing might be out of reach, but buyers have been taking notice of several areas that I predicted would be very popular in the future. St. Clair West and The Stockyards have seen a number of buildings pop up recently, with thousands of units in the works. The area will be unrecognizable in 15 years, with highrise towers lining the UP Express and GO train lines. Scarborough has also been a popular destination, with Kingston Road seeing tons of demand given the pricing is the lowest in Toronto. However, all of the GO train stations in Scarborough are expected to see huge developments surrounding them, with new communities being established – these will be opportunities worth checking out. The GO train is one of the best and most comfortable ways to travel within the GTA.

Next hot markets

As for the next hot markets, look at the Weston area, with the UP Express and the new Eglinton Crosstown LRT in a community with quick access to the 401. It has a very Junction-North feel to it. The next area to watch out for is Yorkdale, as Dufferin Street is densifying quickly, and the lands around the mall will be developed. Expect rapid price growth, as retail, office and residential mix in more creative ways. The third area to pay attention to is Downsview, as this massive property gets redeveloped with midrise condominiums, townhouses and reimagined community spaces.

The demand for new ground-oriented housing – single-detached, semi-detached and townhomes – in the outer-suburban markets has cooled again, after a red hot 2021.

After a couple of years of price flatness and tepid sales absorption from mid-2017 to mid-2020, the single-family market took off in the second half of 2020 into March of this year, as prospective buyers in need of more space due to the work-from-home phenomenon were scooping up the homes. These purchasers are less concerned about commuting times, and were fueled by low interest rates. However, some of those markets lack the type of amenities and proximity to activities that many young families crave, and while some of these sleepy and quaint communities may have looked appealing during COVID when things were closed, demand has dropped now that everything is open again, and interest rates are rising.

'Soft middle'

Areas that I really like right now are in the “soft middle” on the outskirts of Toronto, or in the more walkable areas of the inner-suburban municipalities. The markets in south Mississauga are primed to take off, with greater appreciation in places such a Port Credit and Mineola. Take a look at the Brightwater Community and now-launching Lakeview Village development – huge master-planned waterfront communities. Secondly, the lands around the Mimico and Cooksville GO stations are going to be transformed, and there is clearly an opportunity to get in on the first phases at an attractive valuation – developers need to start these big projects with an immediate sales success and price the initial phases accordingly.

Here is some food for thought: Chestnut Hill Homes launched a new highrise condo in 2007 near the Pickering GO Station at less than $250 psf. The company’s latest project, launched for more than $900 psf last year, and pricing is now closer to $1,050 psf in that node.

If you’re in the market for a new home, surround yourself with an experienced team, including a realtor familiar with the new home market, and a mortgage broker who can find you the best deal. Buy what you can afford, buy for the long-term, and do your research. Good luck.