If you’re waiting for the real estate market in Toronto to crash, then get comfortable because it’s not slowing down anytime soon. Experts have been predicting that the housing market will crash for the past decade now, but in retrospect, the market has continued to grow and stay in demand.
Unless you have been living under a rock, you probably have heard that the average selling price for a detached home in Toronto is approximately $1,053,871, that is a 10.7% increase year-over-year. The hot Spring market was one for the records, but the Fall market is going steadily strong. There has been a whole new slew of buyers this season, as supply and demand pick up.
If you’re looking to buy your first home, the first question you should ask yourself is, “how long do I expect to stay in the house.” When purchasing a home, you want to be sure that you’ll stay in the house for at least five years, generally speaking. Your starter home isn’t usually your dream home, and after a certain number of years, you’re probably going to want to upgrade to a bigger place.
If you’re a first-time home buyer who has been saving to buy a home next year, with home prices rising and affordability deteriorating, in today’s market, taking the leap to buy your first home now could be to your advantage. The average sale price for a home in the GTA is around $630,000, lets use this number as an example to calculate how much extra you would need to save to be able to buy your home a year from now.
If the home you’re looking to buy is $630,000, with 20% down, you need to have at least $126,000 for a down payment. But wait, with the average 10% home increase, one year later the $630,000 home is now going to cost $693,000. With the new home price, your down payment has now increased to 138,600, that’s a $12,600 difference. If you think about it, that 10% increase just upped the value of your home and saved you a few thousand dollars by buying now.
With incredibly low interest rates which will remain for the foreseeable future, limited inventory, and a slew of hungry home buyers, the demand for good housing will continue. When you’re looking for a home, options do become much more limited when buyers are particular about the neighborhood. While some people may think that certain buyers are overpaying for a home, some buyers are willing to put out that extra money if it means they will be living in their desired neighbourhood, are able to be closer to family, or their child has to go to a specific school district. At the end of the day, the home isn’t over valued to the person who is living in it.
Looking at the housing market as a whole, buying a home in Toronto is always a smart decision and a wise investment. Whether you’re looking for your first home, you’re upgrading, or you’re downsizing, having an agent that is looking out for your best interests and knows the market well, is an added bonus.
Are you ready to buy or sell? Contact Susan at 416-236-1241 or email firstname.lastname@example.org