With the little knowledge I have with real estate life cycles, I am sure all real estate markets (including Toronto and Vancouver) for all types of properties (including single family homes) will eventually have a correction.
Currently I do not see enough economic indicators to forecast a downtrend in Toronto & Vancouver area for single family homes. Eventually it will happen.
What we don’t know is:
1. When will the downtrend start
2. How long it would last. It could be for few months to several decades.
3. How much is the correction is going to be
If you are purchasing properties with positive cash flow from rental income, you could withstand the downtrend. The risk is if the population shrinks and you are unable to rent. With large diversified market such as Toronto, I do not forecast this for the next few years.
For now, invest in areas that you have specialized in and going up in value. When possible, remortgage or open a home equity line of credit. Educate and specialize yourself with other upcoming markets. Using the additional capital with remortgage or HELOC , pick other areas to invest. So when the initial market faces a downtrend, your portfolio could sustain and go up in value.
Before all these, identify:
1. Why do you want to invest in real estate
2. What is your target passive monthly income? What is your target asset value?
3. In what timeframe you want to achieve this
With the answers to the above questions, you could identify how many and what type of buildings you need to invest in.
If you purchase a large house in Toronto or Vancouver for you to live, you may not have any rental income coming and you could be in debt with large mortgage. You may be asset rich and cash poor. Optionally if you buy a large building in one of the top 10 cities that has good potential to appreciate, and have good positive cash flow, with the additional income, you could rent a bigger house in Toronto/Vancouver.
Even though it is your first house, if it is fully rented you may or may not qualify for tax benefits as first time buyer.