Nobody likes to be the bearer of bad news, but someone needs to say it: maybe you can’t afford a house in Toronto. The much-sought-after single-family home in downtown Toronto has seen incredible price gains in the last 5 years and the reality is that a lot of people have been priced out of the market. While many would-be Buyers waited for prices to fall this past year, prices increased by another 10%. Not fun, I know.
So what’s a Buyer to do?
- Recognize the games that Sellers play. Sellers know there isn’t much on the market right now and are pricing their houses accordingly. If you see a nice house priced under $450K, accept that it isn’t likely going to sell for that. It’s not uncommon for houses to sell $50K or $100K over asking, so don’t fall in love with a house that’s priced at the top of your budget – you probably can’t afford it.
- Be flexible with location. Sure, everybody wants to live downtown, but it isn’t an affordable option for many people anymore. There are some great neighbourhoods outside of the core that still have good access to transit and where you can still find a house for under $600,000. Of course I’m not suggesting the ‘burbs, but I guess that’s an option too.
- Be open to townhouses. They feel like houses but are a lot more affordable and don’t present nearly the maintenance headaches. You can still get a nice townhouse under $450K in some great transitional neighbourhoods.
- Condos are OK too. If you have less than $400K to spend, a condo will likely be your only choice in downtown Toronto. There’s a great supply of condos too, so you’ll likely be able to negotiate the price down vs. getting into a nasty bidding war. And don’t get all caught-up in the maintenance fees – trust me, you’ll spend more than that maintaining an old Toronto house.
- Consider the semi-renovated house. Most Buyers these days want to buy either the unrenovated-needs-to-be-gutted-house or the fully-renovated-granite-potlights-and-hardwood-floors house. If you have the stomach or skills to spruce up a house or live with it as is for a while, the semi-renovated house might be a good option for you.
- Embrace the ugly house. Walls can be painted, carpets can be removed and that ugly 1970’s kitchen can be given an IKEA treatment. A lot of Buyer shy away from the houses that look bad online, which could mean o-p-p-o-r-t-u-n-i-t-y for you. Of course sharing pics of your new ugly house on Facebook isn’t a lot of fun, but think of the before-and-after photo opportunities!
- Be open with your needs and wants. Sure a garage, a main floor bath and a finished basement are nice, but they’re also in short supply. When we bought our house 5 years ago, we chose to live near the train tracks and with street parking because it allowed us to get into the neighbourhood we wanted. Challenge yourself to compromise.
- Consider living on a main street. Prices on main streets are lower than on side streets, so if you’re OK with a little traffic and the odd bus or streetcar, this could be the compromise that gets you into a house.
If you’d like to know more about what you can and can’t afford, or maybe you just need some creative real estate advice to get you into your first home, we’re just an email, text, chat or call away.