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I get asked this question often. There is no simple answer.
I know how you feel that it's tempting to cash out, prices are so high. This is a difficult question to answer precisely as really, nobody can predict what will happen in the future. Many are now thinking that the market may have peaked in the GTA, but only time will tell.
There have been a few articles written in the press lately about the over-abundance of condos currently on the market and more coming on stream in the next 2 to 3 years. This could potentially create a supply problem and prices could soften in the condo market. Regardless, if you have equity in your investment property, then I would understand that you may wish to take out the equity and move it to other investments that may give you a higher return over the next 5 years or so.
Over the past 3 to 5 years or so the rental market in Etobicoke has been very soft and I have noticed the quality of tenants has dropped significantly. This is due to our extremely low interest rates and many people that would have otherwise rented, purchased instead. The vacancy rate in the GTA is very high and this has impacted investment properties.
I help clients with many of their rentals per year and I am finding it much more difficult to find good quality tenants over the past few years.
Even if we have a correction in our market, I don't think it will be too significant. We are not in a boom similar to the investor fuelled boom of the mid to late 80's so I think (and hope) that we will not ever see the bottom fall out of the market the way we did in '89 to '95.
So there you have it. I am sorry I cannot predict the market more accurately for you. When push comes to shove, you will have to make the final decision.
See how average prices have escalated since 1995, we may be near the end of a 10 year increase.
All the best, and if you want more information, please email me.
Mark
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