WE SPOKE WITH TOP REALTOR FUAD ABASOV ABOUT THE REAL ESTATE MARKET IN ONTARIO

Fuad Abasov has been working as a real estate specialist in Ontario, Canada, for over 12 years. After spending 20 years in the Information Technology sector, he successfully turned his passion for real estate into a thriving career. In 2023 and 2024, he ranked among the top 2% of realtors at Right at Home Realty, a company with over 6,000 real estate agents. Our interviewee is Fuad Abasov, a realtor specializing in Ontario. We discussed the current state of the Ontario real estate market, future expectations, and the best areas for living and investment. First, let’s get to know Fuad Abasov better.

– I was born in Baku, Azerbaijan. I immigrated to Canada with my family in 1992. Before transitioning into real estate, I spent over 20 years in the Information Technology sector, specializing in IBM systems, building / supporting data centers and IT management within the pharmaceutical and steel industries. My career took me across most of Canada and parts of the U.S., allowing me to interact with thousands of clients and professionals from diverse backgrounds and various age groups. These experiences perfected my communication, problem-solving and client service skills – qualities that have been instrumental in my success as a Real Estate Broker.

For more than 12 years, I have been a full-time real estate professional, turning my passion into a thriving career. Success in this industry did not come overnight – it was built through hard work, dedication and the unwavering support of my family, friends and clients. My background in IT, combined with expertise in photography, design and video/music editing, gives me a competitive edge in marketing and advertising. I leverage social media and cutting-edge technology to maximize exposure for my clients’ properties, ensuring top-tier results.

My commitment to excellence has placed me among the top 2% of agents at Right at Home Realty in 2023 and 2024, a brokerage with over 6,000 agents. Those who work with me benefit not only from my industry expertise but also from my extensive network of connections across the city. I truly believe in the power of personal service and am dedicated to making every real estate experience seamless, successful and rewarding for my clients.

– What are the current real estate market trends in Toronto and the GTA? Are prices rising or stabilizing?

– The Toronto and Greater Toronto Area real estate market is currently experiencing a period of, I would say, cautious optimism. While sales activity has picked up compared to last year, the market remains slower than during its peak years. Prices have been stabilizing, with some areas seeing modest gains, particularly in the detached home segment. However, condos remain under pressure due to high inventory levels. We have approximately 40,000 unsold units on the market, which is quite high.

The recent rate cuts by the Bank of Canada have improved buyer confidence, leading to increased market activity. Sales have increased, however, prices remain mostly at the same level in comparison to last year. Based on expert predictions, more rate cuts are expected, which could further stimulate demand.

I see an increase in first-time homebuyers, who were priced out in previous years and are gradually returning to the market, taking advantage of price stability and lower borrowing costs.

The luxury high-end market is slower and it seems as if investors remain cautious, most likely awaiting further rate drops before re-entering aggressively.

I would expect a more active market by mid-2025, particularly if interest rates continue to decline. While prices may not skyrocket, increased demand could lead to more sales in popular neighborhoods.

– Which neighborhoods in the GTA are the best for real estate investment in 2025?

– Investors and those who are looking for a new home should mainly focus on areas with transit expansion, population growth and new infrastructure projects. For example, condos in Mississauga and Vaughan, affordable properties in Durham and future-growth areas like Hamilton offer some of the best opportunities.

I will start with my main area of expertise, which is the York region and primarily the Vaughan area, which is best for luxury & family homes. The city has high-income residents, growing employment hubs and proximity to Hwy 400/407, which makes this area a prime choice. It is ideal for long-term investors looking for stable appreciation and those who want to enjoy a family-oriented area with top schools and low crime rates.

Another one is Scarborough, which is statistically best for long-term appreciation.  Scarborough is undergoing major transit and infrastructure improvements, including the Eglinton Crosstown extension and SmartTrack stations. It offers lower home prices compared to central Toronto with strong rental demand due to population growth.

Mississauga is best for condo investments. Its’ continued urbanization, proximity to Toronto and the Hurontario LRT completion in 2025 will boost property values. Mississauga has a strong rental demand from young professionals and families and proved to have a stable property appreciation.

Oshawa, Ajax and Pickering are best for affordability & cash flow. These areas offer lower prices than Toronto, strong rental yields, lower upfront costs for investors and excellent GO Train access as well as major developments like Pickering’s Seaton project.

Hamilton & Burlington in my opinion are best for future growth & industrial boom.  Hamilton’s waterfront redevelopment, tech industry growth, increasing population, strong rental market and future appreciation potential are making it a desirable alternative to Toronto.

– Which cities outside of Toronto and the GTA offer more affordable housing and are suitable for families?

– If you are looking for more affordable housing options outside of Toronto and the GTA while still having access to good schools, amenities and job opportunities, I would suggest considering these cities:

Hamilton, which is best for first-time buyers & growing families. It offers larger homes at lower prices than Toronto, with strong job growth in healthcare, education and manufacturing. Average home prices for detached homes are within a $750,000 reach. The commute is a 1-hour drive or GO Train to Toronto. As I have mentioned earlier Hamilton is going through major waterfront redevelopment.

Kitchener-Waterloo is best for the tech industry & education. This region is home to major tech companies, universities and a booming economy. Average detached home prices are around the $700,000 mark. The commute is a 1.5-hour drive to Toronto. It offers affordable childcare and has a growing job market.

Guelph is good for a small-town feel, which offers city benefits. It is known for its safe, family-friendly atmosphere, low crime rate, great schools, plenty of green space and the strong job market in education, healthcare and agri-tech. Average detached home prices are around $800,000. The commute is approximately a 1-hour drive or GO Train to Toronto.

Barrie is best for lakeside living & future growth. Beautiful waterfront, ski resorts nearby and proximity to Lake Simcoe to relax during summer months. Barrie is a growing city with strong employment in construction and healthcare. The average detached home price is approximately $750,000. It would take you 1 hour to drive to Toronto or use the GO Train.

London, Ontario offers budget-friendly living and has one of the lowest housing costs in Southern Ontario with a strong job market in healthcare and manufacturing. The average price of a detached home is approximately $650,000. The commute to Toronto will take 2 hours

I would also consider cities like Peterborough, St. Catharines and Cambridge.

– What are the biggest challenges for first-time homebuyers in Toronto, and how can they navigate them?

– Buying your first home in Toronto can feel overwhelming due to high prices, strict mortgage rules and intense competition. However, with the right strategy and working with experienced realtors, first-time buyers can still find success.

Toronto remains one of the most expensive cities in Canada, making affordability a major concern. I would suggest considering condos & townhouses instead of detached homes. Look outside the downtown and midtown areas and mostly in up-and-coming areas like Scarborough, Etobicoke, Newmarket, Bradford, Innisfil and Barrie. To start a real estate journey, explore co-ownership with family or friends to split costs. Common sense would be reducing expenses and exploring extra income streams.

With home prices averaging around $1 million, saving even a 5 – 20% down payment is difficult. Take advantage of first-time homebuyer incentives:

• First-Time Home Buyer Incentive (shared equity program).
• RRSP Home Buyers’ Plan: Withdraw up to $60,000 from your RRSP tax-free.
• Tax-Free First Home Savings Account (FHSA): Contribute up to $40,000 tax-free.

The mortgage stress test makes it harder to qualify for a loan, requiring buyers to prove they can afford payments at a higher rate. To make it easier for banks to approve you, I would suggest these steps:

• Improve Your Credit Score before applying (aim for 700+).
• Reduce Debt (credit cards, car loans) to increase borrowing power.
• To save time for yourself and your Realtor, get pre-approved before house

hunting to know your price range.

• Work with a Mortgage Broker to find lenders with flexible terms. I always have

someone to connect you with.

Higher interest rates increase monthly mortgage costs while reducing affordability. It depends on your personal risk levels that you can tolerate and I cannot provide a financial advice here. Lock in a fixed-rate mortgage to avoid future rate hikes or choose a variable rate as future rate cuts are expected in 2025 – 2026. If you could, increase your down payment to lower borrowing costs.

Usually, when the market is hot, many upgraded homes in desirable neighborhoods receive multiple offers, driving up prices. To navigate in these markets I would suggest getting pre-approved to act fast when making an offer and to work with an experienced Realtor, who can help craft a strong offer and negotiate a reasonable price. Be flexible on closing dates to make your offer more attractive.

Many first-time homebuyers must understand that homeownership comes with hidden costs, such as property taxes, maintenance (if it is a condominium) and POTL fees. In addition, closing costs add up quickly. Always budget for closing costs (approximately 1.5% to 4% of the home price). Expect maintenance expenses (especially for older homes) and consider a home inspection to avoid costly surprises. Do not forget to add Lawyer fees.

Despite these challenges, first-time homebuyers can succeed with proper planning, professional guidance and smart financial strategies.

– How have the foreign buyer ban, and other government regulations affected the Toronto real estate market?

– For those who are new to Canada, it is worth mentioning that over the past few years, the Canadian government has introduced multiple policies to cool the real estate market and improve housing affordability. One of the most significant measures was the Foreign Buyer Ban. It had a minimal effect on prices as foreign buyers made up only 2-4% of transactions before the ban, but high-end condos and homes started seeing less activity from international investors. It also created a shift in investment strategies – foreign investors started buying commercial real estate instead (e.g., multi-unit rentals).

Another strategy was to introduce a 1% vacant home tax on vacant properties to discourage speculation. It increased the rental supply as some investors started renting out vacant properties to avoid the tax. At the same time, it created a slight dip in condo prices as other Investors offloaded units, adding supply to the market. Some property owners switched to Airbnb-style rentals instead of leaving homes empty.

Mortgage stress test was introduced, where borrowers must qualify at a rate 2% higher than their actual mortgage rate. Combined with high interest rates, this has made it harder to qualify for loans. Buyers struggled to qualify while delaying purchases. It created less demand for expensive homes and more demand for lower-priced properties, keeping prices for condos & townhomes relatively stable.

Canada is welcoming over 500,000 immigrants per year and many are settling in the GTA. Supply is not keeping up with demand, despite the foreign buyer ban. It added extra pressure on rental markets and rents have skyrocketed due to higher demand. Contrary to popular belief, the housing shortage remains an issue, and without more supply – prices will likely stay high.

– How are current interest rates affecting homebuyers and investors in the GTA?

– With interest rates today at 3.0%, buyers are facing higher monthly mortgage payments compared to the low rates of just a few years ago. For example, on a $800,000 mortgage, a 1% rate increase translates into a $500-600 monthly increase. This has made it more difficult for first-time buyers to enter the market, especially in the GTA where home prices remain relatively high.

First-time homebuyers are most affected by this, as the stress test combined with high rates can price them out of the market. For example, someone who could have qualified for a $750,000 home in 2021 may now only qualify for $650,000 due to higher rates. As a result, many homebuyers are now looking at more affordable properties such as condominiums, townhomes or homes outside of Toronto.

From my experience of working with investors who are looking to purchase income properties or multifamily homes in the GTA, I can certainly say they are feeling the pressure of higher financing costs. Higher mortgage rates mean increased costs to service debt. This impacts an investor’s ability to generate positive cash flow, especially when the rental market does not always provide high enough returns to offset these costs. Cap rates have been squeezed as mortgage rates rise, meaning some investors are seeing lower yields on their investments.

Cash flow has become more important than capital appreciation for investors and they are mainly focusing on properties that provide solid, consistent rental income. Multifamily units, student rentals and properties in less expensive areas are more attractive to investors looking to minimize risks and improve cash flow.

The condo market has faced challenges and many condo investors are hesitant, as it may take longer to break even or see positive returns. However, short-term rental properties like those on Airbnb remain a profitable venture, although many buildings now prohibit Airbnb, so be cautious when making an offer on one.

– Is it better to invest in pre-construction condos or resale properties in Toronto right now?

– Nowadays I would suggest resale properties rather than pre-construction. Pre-construction properties in today’s market will cost more than resale ones. Developer fees, HST and other closing costs significantly increase the final price compared to a resale property. Do not forget about interim occupancy, a period during which the owner is required to make payments to the builder until the property is officially registered with the city. These payments can be quite substantial, are non-recoverable, and do not contribute toward your mortgage. Essentially, it’s money spent without building equity.

The only way to offset some of these costs is if the builder permits you to rent out the unit during this phase, allowing you to generate income until final occupancy. Always check your agreement and discuss rental options with the builder before purchasing a pre-construction property.

One of the biggest advantages of resale properties is the ability to start generating rental income immediately after purchase. This is an ideal scenario for investors looking for cash flow right away. Resale homes provide more predictable rental returns, especially in established neighborhoods. Resale properties are priced based on current market conditions and investors have a clear understanding of what to expect in terms of price and rental demand.

– What are the best areas out of GTA to buy multi-family homes for rental income?

– Based on recent reports, I would say these are some of the best areas to consider:

• • Hamilton with its strong rental demand and urban growth.
  • London with its strong student market.
  • Kitchener-Waterloo, which is a tech hub with high rental demand.
  • Niagara Region with strong tourism and retirement sectors.
  • Ottawa with its government sector provides consistent rental demand.
  • Windsor with affordable real estate and proximity to the US border.
  • Sudbury with affordable real estate.
  • Barrie is also very attractive in terms of rental income.

Each of these cities offers different advantages and I can connect you with experienced Realtors in any of these areas.

– How have short-term rental regulations affected Airbnb investments in Toronto?

– Sometime in 2018, Toronto introduced short-term rental regulations, which had a considerable impact on Airbnb investments. Before that, a short-term rental market has been a significant source of income for many property owners.

With restrictions, the number of properties available for Airbnb has decreased significantly. Many property investors who were renting out multiple properties or entire units have been forced to either sell their properties, convert them back to long-term rentals or stop renting them out altogether.

Investors who owned properties in neighborhoods that were previously popular for Airbnb listings started experiencing a drop in property values, reducing their potential return on investment when they decided to sell.

– With the current rules in place, which areas in the GTA still offer good opportunities for legal and profitable short-term rental investments?

– As a reminder and to comply with regulations, properties must be registered with the city and owners can only rent out their primary residence for a maximum of 180 days per year. Some neighborhoods and areas may still offer a profitable return, especially those with high demand for tourism or business travel. Examples are Downtown Toronto, The Beaches, Yorkville and Rosedale, Etobicoke and Scarborough.

– How is the luxury real estate market performing in Toronto compared to other major Canadian cities?

– Toronto, with its unique characteristics and challenges, remains a dominant player in the Canadian luxury real estate market. Although prices in the luxury segment have cooled slightly due to rising interest rates and overall economic uncertainty, the market overall remains strong.

The demand for luxury homes in prestigious neighborhoods like Rosedale, The Annex, Forest Hill and Bridle Path, seems to surpass the available supply.

In recent years, Toronto has seen some record-breaking sales in the luxury sector. For instance, a $32 million sale in Bridle Path in early 2024 has set new benchmarks for Toronto’s luxury market, signaling continued confidence in high-end real estate.

– Where do you see the Toronto real estate market heading in the next 3-5 years?

– If I received a dollar for every time this question was asked, I would be much richer. The reality is, that no one can predict what will happen, but while predicting the future of the real estate market can be complex, I can make some educated projections based on current trends, policies and global economic conditions.

Over the next few years, home prices in Toronto are expected to stabilize after experiencing significant volatility. After the pandemic-driven surge in prices, we saw a cooling period, especially with the rise in interest rates. However, as the economy adjusts and the interest rate hikes moderate, we can expect price growth to become more gradual, with less drastic fluctuations.

Market conditions keep changing, but my approach to exclusivity in representation, commitment, ethical treatment, honesty and protection of clients does not!

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