Purchasing a new home for yourself or as an investment is a significant decision. For some it’s a milestone for starting a new life. For others it’s an investment to build a robust portfolio.
Buying a new home in the GTA is a long-term financial commitment. Which is why understanding the Toronto housing market is important. Doing so will provide insights regarding which Toronto neighbourhoods are up-and-coming, the average price of a household and demand for housing. This will help you decide what neighbourhoods are within your budget and what to expect when you embark on your home search.
When you consider a home purchase, especially in a competitive city like Toronto, it’s important to be aware of the market conditions. If you are about to begin your initial market research, you need to ask yourself:
If you answered yes to all three questions, you are ready to start your research. Below are four key Toronto housing market insights that establish why this year is a great time to buy a home in the GTA. You’ll find these insights helpful for your initial research.
1. Mortgage Rates are at Record Lows
If you are looking to purchase a new home in the GTA, now is a great time to take advantage of the low interest rates. Mortgage rates for 2021 are predicted to stay below 3% until the end of the year, according to Bank of Canada Governor,Tiff Macklem. Lower interest rates will mean lower monthly payments to pay off your mortgage. Lower rates will also mean that you will have more wiggle room for your budget.
2. Semi-detached Homes in Toronto and Single Detached Homes for Sale Are a Good Investment
Semi-detached homes in Toronto and single detached homes are a good investment because the value of your home will increase. Here’s why.
Historically, housing prices have steadily climbed since 2015. Last year, the average price increase per house was 20% higher than 2019. These steady increases are correlated with the demand for living in more spacious homes. During the peaks of the pandemic, the growth will continue.
These rising house prices mean higher appreciation rates. According to Moody’s Index, appreciation rates have increased to 2.2% year over year. This means if you invest in a home this year, not only will the price of your home increase over time, the appreciation of your home will also be higher. With the mortgage rates at record lows, now is a good time to invest in semi-detached and detached homes to get a good return on your investment.
3. Investing in More Space is Beneficial
COVID has played a significant role in driving the demand for semi-detached and detached homes. Home has taken a new meaning because it is where people are spending most of their time.
With most of the population working remotely, many are looking to move into homes with more bedrooms which can be used for office spaces, home gyms, and recreational rooms. Likewise, the demand for large backyards and being near parks and other outdoor recreation areas has also increased.
Single detached houses for sale that have these features tend to be in more residential areas such as Alderwood or Longbranch. If this is the lifestyle you would like to invest in, now is an opportune time to take advantage of the lower interest rates.
4. Condo Sales are Down
If you’re not looking to expand, or if you’re looking for an investment property, now is ideal to look for condos in Toronto. Lower mortgage rates will enable you to borrow money affordably.
In addition to lower interest rates, you’ll be able to have more time to put in an offer on your dream condo. According to Remax, condo sales dropped by 10% since 2019. With the condo market underperforming compared to 2019, you’ll have more flexibility around your location, space and amenities. If you’re looking to invest in a condo, 2021 is a great year to do so because they’re affordable and there will likely be more supply.
Why You Should Invest in Real Estate This Year
Whether you’re choosing to purchase a condo, semi-detached or single detached home in Toronto, 2021 should be the year you consider investing in real estate. You’ll be able to take advantage of lower mortgage rates, semi-detached and detached homes will appreciate over time and you will make a great return on your investment.
If you’re looking to buy a single detached home or semi-detached home in Toronto, contact us.