New | Toronto gaining attention for Hong Kong buyers; A primer on where to go

In recent years, Canadian real estate sales have met good responses in Hong Kong, and while Vancouver appears to be the hot spot, Toronto is also gradually gaining attention. Most projects involve pre-sales of high rise condominium units, some of which are located in desirable neighborhoods.

With the Canadian dollar at recent lows (less than HK$6 to one Canadian dollar), a brand new 500 square foot or so studio condo unit in a competitive metro location can be acquired for a bit more than C$250,000, or around HK$1.5 million, which is barely enough for the required down-payment for an ‘extremely modest’ first-time-buyer Hong Kong property. No wonder many in Hong Kong deem the Toronto real estate a steal.

Now, to those not quite familiar with metro Toronto, a lingering question could be “where to invest?” and here are some clues:

- The Toronto real estate market has been steadily rising for some time. Since 1996 when it started to recover from the downturn during the late 1980s and early 1990s, there was not even much of a dent during the Financial Tsunami and Recession in 2008-2009.

With the global implementation of Quantitative Easing (QE) in recent times, prices have been shooting up further. Like other places with rising house prices, many young people and families are finding it hard to save enough down-payment for a home. Certainly the house price to income ratio has also been marching up. Risks? Technically yes, there are some but your humble author does not expect Toronto to suffer the worst downfall in Canada if something does happen.

- Toronto has a nine million people economy. The metro has three million people in it and if one extends beyond the metro boundary to include the surrounding suburbs and towns, add another three million. And if one further expands beyond the ‘green belt’ to include the many countryside communities and farms, add a further two million to three million. That is to say, Toronto economically involves directly and indirectly close to nine million people.

- Stick to the metro portion (especially if you intend to invest and then rent out the property). There could be some bias on the part of your author as his Toronto investment portfolio is metro-centric.