Buying a home is the biggest financial decision you will make in your lifetime. It’s where you will be settling down and starting your new life. When the pandemic hit in March 2020, we all faced the reality that home was where all our time was going to be spent. First time home buyers faced the pressure with new restrictions in place to find their perfect Toronto home. The inevitable was a lockdown. Despite all businesses having to shut down, the housing market had to remain open because housing is essential.
If you are buying a home for the first time while navigating the new restrictions of Toronto real estate, you’ve come to the right place. Below are 10 things you need to consider when purchasing a Toronto home during the pandemic.
1. Be Prepared for Restrictions on Home Viewings
Restrictions change frequently.
When the pandemic first hit, all home tours were done virtually. That meant you couldn’t physically inspect the space or get a feel for the home before you signed any documents. All decisions had to be made based on a virtual tour that had curated images and professional lighting.
Eventually, in-person showings of Toronto homes could resume. This made the home buying process a little easier. The main difference was you couldn’t have your realtor lead the tour. You would have to look at the home first and put your questions on hold until you met with your realtor after.
Although you’re currently allowed to attend in-person viewings, restrictions are always changing. There is always the possibility that viewings will revert back to virtual tours. If that became the case, ask to see more footage. If your agent or home builder has more raw images of the property, it will help you get a feel for the space.
2. The Demand for Housing Is Up
The housing market has not slowed down the demand for homes. According to Toronto Storeys, the housing market has increased by 25% since 2019. COVID has given home a new meaning. It’s where we spend most of our time. This is why more people are veering away from condos and looking at houses for sale.
People are gravitating towards spacious homes with backyards in neighbourhoods where there’s more accessibility to outdoor activities. Alderwood, a neighbourhood in Toronto’s west end was just named one of the best areas to buy a property by Money Sense. This neighbourhood is close to many parks and is only a stone’s throw away from Sherway Gardens which is why it has become increasingly popular.
With the increasing demand for housing it’s better to be on top of the up and coming neighbourhoods. That way you won’t miss out on buying your ideal home. Even though demand is up, mortgage rates are at an all time low.
3. Make Sure You Research Your Financing Options
Now is the perfect time to take advantage of low mortgage rates. Don’t be afraid to shop around and find a plan that fits your needs. There will be other costs you’ll need to consider before putting in an offer on your home. This is why budgeting and research will help accurately determine what you can afford.
If you’re researching your finances, here are three ways that will help you calculate your budget:
- Down payment– Your down payment is the first step to paying off the house. When you are putting in an offer, make sure you are ready to make the initial down payment. The required down payment for a home can vary depending on the price. The general rule of thumb is to put a 20% down payment on your home.
- Debt to income ratio– This is the measure of your monthly debt versus how much income you’re earning. When you’re getting approved for a loan, mortgage brokers look at your current debt to income ratio and what you can manage to pay off long term. Loans Canada recommends that your debt to income ratio is not over 50%. As a first time home buyer, you need to make sure that you can manage a mortgage payment on top of other expenses.
- Mortgage- Your mortgage payments will most likely be long term. As a first time home buyer, it’s important to look at the different types of mortgages that best suit your financial needs. TD bank has a mortgage calculator that helps determine the best plan for you.
4. Choose Your Neighbourhood Wisely. It’s Where You’ll Spend Most of Your Time.
Establishing your budget will help determine the neighbourhoods that are within your price range.
Never in a million years did we ever think that we would have to consider a pandemic when choosing a neighbourhood.
Where you live has taken a new meaning because it’s where you are spending most of your time. When you’re choosing your ideal neighbourhood make sure there’s plenty to do outdoors because businesses will likely be closed for the next little while.
5. Your Neighbourhood Should Reflect Your Lifestyle.
Your lifestyle during COVID most likely changed because of business closures. Make sure you choose a neighbourhood that will not only reflect your lifestyle today but in a few years from now.
When you’re considering a neighbourhood to choose, you have to ask yourself, what are your non-negotiables? What would you like to live close to? Are you someone who prefers to live near parks or do you prefer to be close to restaurants and shops?
If you’re someone who wants to be near restaurants but also wants the balance of being away from downtown, The Junction is a great neighbourhood that has the best of both worlds. The area has lots of character and is conveniently close to the financial district.
If you’d prefer a more suburban, quiet neighbourhood that is accessible via public transit or highway, Alderwood is for you. It’s close to Etobicoke Valley Park and other amenities like gyms, grocery stores and Sherway Gardens Mall.
6. Proximity to a Quality School is Important
When you’re considering neighbourhoods, you’ll need to think about where good schools are located.
Not only living nearby a good school is beneficial but it’s convenient. When schools reopened during COVID, there were lengthy processes for dropping off and picking up your kids which meant waiting in extensively long lineups to get your kids into class, not to mention the additional commute times. Being within walking distance will shorten the commute time and it will make the lineups seem less daunting.
If you’re researching schools, Fraser Institute provides school rankings by neighbourhood.
7. You Should Still Consider Being Close to Public Transit
When you’re choosing your ideal neighbourhood, accessibility is important. Although public transit isn’t being used as much for commute, that could all change. It depends on the future of work. Just because you’re working remotely right now doesn’t mean you will be in the next two years. You should consider living close to public transit in case office work resumes. It will reduce commute times and your mornings will be a lot easier.
If transit accessibility is important to you, here is a public transit ranking system that measures how well each Toronto neighbourhood is served by the TTC.
8. How Much Renovation Work Can You Manage?
Once you find a neighbourhood you like, it’s important to establish your ideal features in a home. Consider the renovation work that’s required.
Buying a fixer-upper may reduce your initial investment, but it can also end up costing you quite a bit, both in time and money. It’s important for you to consider how much of the renovation work you can realistically manage on your own and how much you will need to outsource to professionals.
As a first time home buyer, you should also consider how COVID has impacted the timelines for acquiring building permits, as well as the availability of contractors and construction materials. The above details could seriously alter your move-in date.
The less renovations required, the easier and quicker the move will be. If you are looking to buy a fully renovated home, you can buy a renovated Toronto Home that’s distinctively different and in the heart of an up and coming neighbourhood.
9. Make Sure You Have an Office Space For Yourself
COVID has changed the way we work which is why it’s important to create an office space for yourself. Work-life balance has been the struggle for many of us because the lines are blurred between when you can decompress and when you’re expected to work.
As a first time home buyer, consider designating an area of the house specifically for work. It will help boost your productivity and improve your routine before gearing into work mode. It will also help you establish boundaries between work and your personal life.
Creating an office space might mean using an extra bedroom or creating an office nook in the basement. The beauty of creating an office is that you just need to find a space that will be away from all the distractions where you can dive into work and focus. This space will be useful in the future when office work resumes for the odd days when you need to work remotely.
10. Be Aggressive and Act Fast
Once you’ve found your perfect home that’s within your price range and in your ideal neighbourhood, prepare yourself for a bidding war. The pandemic has drastically increased the demand for houses. According to the Toronto Regional Real Estate Board, houses for sale in 2020 increased by 25.1% since October, 2019.
If you think you’re the only one interested in a Toronto home, think again. Get ready for some competition with other enthusiastic buyers. Acting quickly and going in strong will help increase your chances of getting your dream home.
One More Thing…
Even if you don’t land the first home you put an offer in, don’t be discouraged. There will be other houses. This is a part of the home buying journey. You just have to keep searching until you find your dream home. Don’t let COVID prevent you from embarking on your house hunt.
If you have any questions about buying a home in Toronto Contact us.