The Canadian real estate market is one of the more discussed markets in North America, and for very good reason; between Toronto, Vancouver, and Calgary, you are dealing with some of the most expensive housing markets on the entire continent. One bank even insisted that Canada has the most overvalued housing market in the entire world. And with Toronto reaching a milestone this quarter of seeing their average cost of single-family homes escalate over $1.0 million, the experts atCanadalend.com advise that some first-time home buyers looking to get on the property ladder may have to take a different route.
With condos in Toronto averaging a third of the cost of a single-family home—approximately $376,000—first-time buyers are almost forced into considering a condo as their initial purchase instead of a house. It’s a tough pill to swallow, especially for those buyers who are looking to start or already have a family, but as the housing market continues to soar, condos are becoming the most affordable option.
Seventy percent of all Canadian first quarter condo transactions took place in Toronto, comprising the majority of the 9% year-over-year increase in sales. And while the average price of a condo within Toronto is also up 5.6%, it still seems to be the more affordable route for first-time homeowners.
Another option for first-time home buyers is to wait, but with the current interest rates remaining as low as they are, that may not be the most intelligent decision. In addition, first-time buyers are typically in the market because they need a home right away and waiting just isn’t an option. This may be because they are having their first child, about to get married, or have settled into jobs that allow them the stability and finances they need to take that step.
While Vancouver still remains the most expensive city in North America to buy a home, Toronto and Calgary are both in the top 10. With those being three of the major cities in the country, it’s difficult for first-time buyers to do anything but consider purchasing condo units.
The high cost of living doesn’t seem to be affecting homeowners in general; Vancouver in particular saw a 40% year-to-date sales increase despite a three-percent rise in prices. Low interest rates may be a factor in that stat—a variable that experts are saying won’t last much longer.
It’s important for first-time home buyers to visit Canadalend.com to determine their financial reality. Canadalend.com will find a suitable lender and then establish a mortgage rate that works best for you. For first-time home buyers in particular, Canadalend.com is a great asset because we take all of the initial work off your hands.
We’ll search our databases and get you approved by a lender within 24 hours; then you can decide what type of housing is affordable for you and whether or not living in one of the major Canadian cities is worth the cost.
The high cost of living in any of these cities should not deter first-time home buyers. Overall, there is an abundance of homes, and with some patience, finding the right one at the right cost is definitely possible. Affordable homes are also available not far outside each of these major cities, and usually at much better rates. As the purchaser, it’s up to you to determine what is most important to you when buying your first home; start by visiting Canadalend.com to get the absolute best mortgage rate that works for you.
“North America’s top 20 housing markets: Vancouver, Toronto, Calgary among most expensive on continent,” The National Post , March 5, 2014; http://business.financialpost.com/2014/03/05/north-americas-top-20-housing-markets-vancouver-the-most-expensive-on-continent-while-toronto-calgary-beat-new-york-city/ .
Tencer, D., “Average Price for a Single-Family Home in Toronto Passes $1 Million,” Huffington Post , April 18, 2014; http://www.huffingtonpost.ca/2014/04/18/house-prices-toronto_n_5174437.html .
Pigg, S., “Condo sales, prices up—but rents starting to ease,” The Toronto Star , April 15, 2014; http://www.thestar.com/business/real_estate/2014/04/15/condo_sales_prices_up_but_rents_starting_to_ease