What to buy – a house or a condo? Where to buy – in Toronto or in the GTA? See what Toronto real estate agent wants to share with you.
Of course, if you are considering buying a home, the first step is to decide:
- How much you are comfortable spending on a monthly basis
- what the down payment will be
The larger your down payment, the better the benefits. For example, with down payment of 20% or more you can avoid paying CMHC insurance – mortgage default insurance. The premiums for mortgage default insurance are calculated as a percentage of the mortgage and paid up front or by adding it to the principal portion of the mortgage. Eliminating or decreasing this premium can result in significant savings over the lifetime of the mortgage.
“Housing in the greater Toronto area – several markets, several tales”
On March 10, 2014, TD Bank released a new report: “Housing in the greater Toronto area – several markets, several tales”
- “Condo development in the GTA has focused on high rise projects where the economics of construction has been the most favourable. Condos in high rise buildings have accounted for over 60% of supply of overall new homes in the region since 2011, compared to just 28% in 2000.”
- “The inventory of new condos in high rise buildings (both under construction and in the pre-construction stage) available for sale has been expanding rapidly. A combined 70,000 units are expected to be to be completed over 2014 and 2015 – twice the pace of the historical average. While a majority of these units have been sold, roughly 9,000 of the units remain to be absorbed”
- “Among the concerns surrounding the high-rise market is that a significant amount of these units are held by investors. Surveys suggest that 26% of condos in the GTA are used for rental purposes.”
“We expect homes sales and price growth to cool gradually over the next few years,” says TD bank.
According to the Toronto Real Estate Board March report “Latest Mid-Month Resale Market Figures”:
- The average selling price for all home types combined in the GTA was $560,948, which is 6% up in comparison to the same time frame in 2013.
- The semi-detached market segment in the City of Toronto showed a year-over-year increase of more than 10%
416 area versus 905 area
In the 416 area detached or semi houses cost $300,000 (or over) more than in 905 area, and resale condos – $80,000 more.
Ipsos surveys said: almost 25% of Canadians expect their homes to be primary source of retirement income
An Ipsos Reid poll was conducted between November 12 and 20, 2013, on behalf of Sun Life Financial – a leading international financial services organization providing a diverse range of protection and wealth accumulation products and services to individuals and corporate customers.
The survey showed that due to constant growing of house prices in large Canadian cities, nearly a quarter of Canadians plan to use their homes as their primary source of their retirement income.
- The average single-detached home costs $718,000
- An existing condo sells for $347,000
- A new condo is priced at $545,000.
- Strong price growth for detached and semi-detached houses will be the result for the remainder of 2014.
- New and existing condos account for 60% of Toronto and GTA real estate market.
- New condos share was 24% of home sales in 2013.
- Multi-units accounted for almost 80% of construction in 2013
- 26% of condos are purchased as a rental investment.
- Average rent on a condo in the GTA is $1,700.
- In the 416 area houses cost $300,000 more than in 905 area
- In the 416 area condos cost $80,000 more than in 905 area
- Almost 25% of Canadians expect their homes to be primary source of retirement income
No doubts, Toronto’s homes are overpriced, however, mortgage costs, not just home prices, are the principal deciding factor for potential home buyers. Again, ongoing employment and population growth will continue to support housing demand.
With borrowing costs remaining relatively low, strong house ownership demand will continue to climb up, but it does not apply for condos: in a few words – GTA houses stay hot, but condos are not. Semi-detached houses represent a more affordable ownership option.
So, you have the facts in hands and the decision is yours.
By Nina Timoshyna, Right at Home Realty Inc., Brokerage
- Sales Representative
- Sun Life Financial Canada: http://www.sunlife.ca/Canada/sunlifeCA/About+us/Newsroom/News+releases