With the rising price of housing in the Greater Toronto Area (GTA) and surrounding areas and the recent mortgage rule changes, first-time buyers aren’t the only ones struggling. The average price of a new low-rise home in the GTA is nearly $1 million, so move-up buyers are feeling some pressure too.
Since upgrading to a larger home is becoming more difficult, let’s take a look at six questions move-up buyers should ask themselves before making the big decision.
1) Should we sell or buy first?
It’s an age-old dilemma – should you sell your current home before buying a new one, or the other way around? We can’t answer this question for you, but we can help guide you to a solution.
If you’re living in a popular, in-demand area right now, then you may be able to risk buying first. Ask your real estate agent how long homes in your area stay on the market. If the homes are selling quickly (in a few days or weeks), then you’re probably safe to buy before selling.
If homes in your area stay on the market for one, two or three months, then you should consider selling first. Aside from your location’s popularity, it all really depends on whether you can financially support carrying two homes or not. If you can comfortably do so, then go ahead and buy if you find the right home!
2) How much space does my family need?
Answering this question is more difficult the younger you are. If you’re buying a new home in anticipation of raising children, you need to buy based on how many kids you think you’re going to have. Everyone knows things don’t always work out as planned. You may buy a home with two bedrooms and end up with four kids. Then what? Then you need this blog post about sharing a bedroom.
Think about what activities your family enjoys. Hockey players need a lot of storage space. Tennis players, not so much. Do you have parents that are retiring soon and expect to stay with you sometimes? Do you have family out of town that will be spending lengthy visits?
3) Can we actually afford it?
You may feel like you need more space, but you actually just want more space. There’s a pretty big difference, especially if you can’t afford a larger home at the moment.
Don’t get frustrated by limited space and just automatically jump to the conclusion that you need a five-bedroom home. Try tackling your most troublesome rooms one at a time with different storage solutions, and it may help to take on the minimalism challenge. You’d be surprised at how much space you have when you realize that having too much stuff is actually the issue.
4) Where do we want to be 10 years from now?
Once you move into your new family home, you’re going to be surprised at how quickly the next decade flies by. Identifying where you want to be as a family and having a plan on how to get there will be very helpful when it comes to buying a larger home. It’s not just about the size of your family, you should consider new hobbies and career changes too!
5) Should we change neighbourhoods?
It’s common for couples and small families to fall in love with their neighbourhood and want to look for something larger in the same area. But, you have to decide whether you can realistically afford a larger home in your neighbourhood. You may have purchased your first home six years ago for $400,000, and the value has gone up, but now detached homes on your street are selling for over $1 million and you live in a townhome worth $510,000.
Changing neighbourhoods is overwhelming, anxiety inducing, and frightening. You’ve grown familiar with your area, so it’s natural to want to stay. If you can afford to stay in your area and you find the right home, you should jump on it. If you can’t afford it, just know that there are many great neighbourhoods in the GTA and you will find one!