| Feb 16, 2021
The Toronto housing market has a reputation for being competitive, expensive and lucrative – characteristics that work in favour of home owners and sellers, but are creating some challenges for homebuyers entering the market. First-time homebuyers in particular will face some obstacles ahead this year. Here are some of my strategies for tackling this tough market.
Low inventory: Toronto is experiencing some inventory issues, particularly in low-rise housing, as buyers appeared to abandon their condo lifestyles in favour of detached homes that offered the benefit of more privacy and space during the lockdowns. Meanwhile, this caused a spike in condo inventory last fall, but this proved temporary. As condo prices declined, interest picked up and according to the latest data from the Toronto Regional Real Estate Board (TRREB), units are on the move again and if the trend continues, prices will soon follow.
For homebuyers, this means limited choice, multiple offers and high prices are the current market reality. Working with a professional real estate agent can help mitigate the stress associated with these challenges, while keeping things in perspective. To the buyer, a home is a very personal thing and where one may be tempted to enter into a bidding war, a good agent can and should advise you on where to draw the line. Remember, a home is only worth what someone is willing to pay for it.
High prices: Speaking of prices, in its 2021 market outlook, TRREB forecasted the average residential price in the GTA will top $1 million this year. Now, the GTA is a big place bordered by Oakville to the west, Oshawa to the east and Newmarket to the north. When you narrow it down Toronto proper, the average residential price will be well into seven figures.
Those who currently own a property and want to move around within the Toronto market (for example, upgrading into a larger home or downsizing into a smaller one) have more wiggle room – pun intended. First-time homebuyers, on the other hand, are often stuck between a rock (not owning a property) and a hard place (not being able to buy one). Thankfully, interest rates are on their side, as the cost of borrowing has never been cheaper. Given a solid down payment, flexibility when it comes to housing type and neighbourhood, and determination, homebuyers can still buy in this market at a price they can afford. Then, with time and growing equity, they too will have a chance to move up the property ladder.
Consult real estate professionals like us that can offer the best options now available to you, which may include condo or townhome living, or potentially a home with an income suite, to help pay down your mortgage and build your equity faster.
Toronto’s current seller’s market won’t be shifting any time soon. Demand for homes in only expected to intensify as borders and businesses reopen, and immigration resumes. The good news is Toronto and surrounding GTA ahead remains an attractive place to live, which bodes well for property values. As a homebuyer and sellers, this is the ultimate long-term goal.