Recently, a few people have asked me about whether now is a good time to buy and/or invest in real estate in Toronto. Now obviously this is a general question and a thoughtful answer depends on the asset class, your strategy, and a myriad of other possible factors, but one of the things I've noticed is that many people are trying to be incredibly precise in determining an answer to this question right now.
They'll talk about how much prices have come down, whether the Bank of Canada is going to lower interest rates again this fall (which seems probable), and then question whether it may be more optimal to buy in, say, 4-6 months versus now. It is, of course, always beneficial to be analytical, precise, and thoughtful about risk when evaluating major financial decisions, but I find it interesting just how perfect people are trying to be about timing.
It's interesting because when things were exuberant, the amount of worry over optimal conditions was clearly less. More people just believed in the market, believed in Toronto, and believed that immigrants would continue to move here at a high rate. It felt right. Greed ruled over fear. But as these market cycles go, the opposite is true today. Fear is the more dominant emotion. Many people are scared about making a bad decision, which is expected, but arguably ironic at the same time.
It's expected because it is harder to make what feels like a high-conviction bet when the market is moving in the opposite direction, things are uncertain, and there are few people to follow. But it's ironic in that it's significantly easier to find value today than 3-4 years ago. The best opportunities exist where other capital is not flowing, and a lot less capital is flowing into Toronto real estate these days.
