As a world-renowned city, Toronto is known for a lot of things. Unfortunately, one of these things is the high cost of real estate. This has led many Generation Zers to wonder – will I ever be able to afford a home in Toronto?
The good news is that it’s not all doom and gloom for younger Torontonians. In fact, a lot of the challenges facing today’s buyers have been faced (and overcome) by generations past.
In this blog post, we’ll look at the realities of buying a home in today’s market and how younger buyers can fast-track their real estate goals by being flexible.
Affordability For Previous Generations
Concerns about housing costs aren’t unique to today’s buyers. In fact, every generation of Toronto buyers has faced affordability concerns – all the way back to Baby Boomers.
As Generation X began buying homes in the 1980s and early 1990s, they faced a significant challenge – skyrocketing interest rates. Mortgage rates in the double digits made owning a home considerably more expensive, even though property prices were still relatively reasonable. Then, when it came time for early Millennials to find their first home, they too encountered a unique set of hurdles. While interest rates had significantly decreased by this point, property prices had surged.
That said, despite these shared challenges, buyers from every past generation have persevered and successfully purchased homes in Toronto. Now, as the newest generation to enter the market, Generation Z can do the same.
Searching for the perfect Toronto neighbourhood to buy your first home? Check out these blog posts.
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A New Perspective on Interest Rates
Interest rates are often the primary culprit in conversations around housing affordability in Toronto. While it’s true that rates have been on the rise since early 2022, today’s average costs of lending aren’t as dire as many assume.
It’s easy to look back at the ultra-low rates of years past and feel like mortgage costs have suddenly reached record highs, however, that’s not the case. Compared to the past four decades or so, today’s mortgage rates are more or less average. In the grand scheme of things, the give-or-take 2% mortgages from just a few years ago are far more anomalous than what today’s buyers are paying.
If you’re hesitant to buy a home because of interest rates or have other concerns about affordability, speak to a real estate agent. They can help you assess your finances to see what your buying options are.
Resetting Expectations
For a lot of buyers, resetting your first home expectations can help you get into the market sooner rather than later. Toronto real estate is diverse, offering a range of housing types, from single-family homes to condos and townhouses. To increase affordability, be open to compromises in terms of location, size, or housing type. Expanding your search beyond a few select neighbourhoods can also yield more affordable options without sacrificing quality of life.
Consider starting your homeownership journey with a starter home rather than aiming for your dream property right away. A starter home may be smaller or require some renovation, but it can serve as a stepping stone toward your long-term housing goals. Over time, moving up the property ladder will become easier because you’ll have equity you can tap into.
Buying a home in Toronto? You’ll want to work with a locally knowledgeable real estate agent. Visit these blog posts for helpful tips.
- How to Read Between the Lines of Agent Reviews
- What If I’m Ghosted by My Real Estate Agent?
- How Many Real Estate Agents Should You Interview Before Choosing One?
Options for Supplementing Your Mortgage Payments
In addition to adjusting your expectations, there are other ways you can lighten the financial stresses of homeownership. Once again, this may require some flexibility, however, it can make your real estate goals much more accessible.
As part of your first home purchase, consider creating a secondary suite. This could be a basement apartment, garden suite, or other area in your home. Secondary suites can help you generate extra income to put toward your mortgage, property taxes, and other housing-related expenses. Plus, they can also make your home more valuable in the long run.
Ready to begin your journey of homeownership? Silver Burtnick & Associates can help. Call 416-587-3300 or click here to send us an email.