With home prices continuing to rise in the Greater Toronto Area (GTA) and condo prices in both the resale and new market expected to grow this year, it’s easy for first-time buyers to feel defeated. In addition to rising prices, the new stress-testing for insured mortgages also limits your borrowing power (if you don’t put down 20%).
All that said, we believe that there are still many reasons for first-time buyers to stay positive. Whether 2017 is the year you’re planning to buy a home or you’ve been forced to extend your purchasing plans, you should look on the bright side of things. Here’s why:
1) The increased Land Transfer Tax rebate
In the Fall Economic Statement, the Government of Ontario announced that the Land Transfer Tax rebate was increasing from $2,000 to $4,000 for first-time buyers. So, if you do plan on buying a home this year, you can look forward to saving that extra money. If you buy a home that costs $367,990 or less, then you won’t pay any Land Transfer Tax.
2) Save a bit more
So you can’t borrow as much as you’d like and prices are getting out of control. Just use this situation as an excuse to come up with an airtight savings plan. Set a financial goal and figure out a way to hit it. The best way would be to decide out how much you want to put down on a home, and then decide when you want to buy a home (realistically). This will help determine how much you need to save every month to reach your goal.
3) Use the time to do more research
For home types, you should know that you’re not restricted to condos in the downtown core. Due to a lack of single detached land, more builders are building stacked townhomes, traditional townhomes, and back-to-back townhomes. Depending how deep into the 905 you go, you may even find some bungalows or larger boutique condo units that suit your lifestyle.
4) Explore different neighbourhoods
Is your heart set on King West? Have you explored other areas of Toronto? Don’t get us wrong, King West is an amazing neighbourhood. Minto Westside is under construction at Front and Bathurst, and it’s been very successful. There are big plans for that site. But there are so many unique neighbourhoods of Toronto and we bet you haven’t been to them all.
If you’re a west-ender at heart, why not check out the east? Leslieville, Regent Park, Corktown, Cabbagetown – big things are planned for these areas. You can also get out of the downtown core and check out North York, Scarborough, The Beach, or Humber Bay.
On an international scale, Toronto is still affordable when it comes to real estate. It doesn’t seem like foreign investment will slow down any time soon, and despite what some media is reporting, there is plenty of room for downtown Toronto to grow. If you think too much density is an issue in Toronto, you’ve never been to Hong Kong or Manhattan!
More condo towers will be built and more townhome communities will pop up in the 905; you don’t need to feel rushed or like you’ve missed out on something. You should get into the market when you can afford to do so, when it makes sense for your future.