Are Homes in the Greater Toronto Area Getting Less Affordable?
After a quiet, uneventful winter, the housing market in the Greater Toronto Area is heating up. But is it getting too hot for first-time home buyers? Toronto is on the verge of following Vancouver as the second city in Canada where the average price of a detached home is $1.0 million.
For homeowners who have seen the value of their property climb 13% year-over-year, that’s great news. But as Zoo Mortgage warns, for first-time home buyers or those looking to get back onto the property ladder, it can be discouraging.
In April, the average price of a home in Toronto (including condos) climbed 10.1% year-over-year to $577,898; more specifically, the average price of detached homes sold in Toronto (the 416 area code) was $965,670, a 13% year-over-year increase. The average price for a detached home in the Greater Toronto Area (the 905 area code) increased 9.6% year-over-year to $645,179.
Why the surge in price? Like any commodity, it’s all about supply and demand. A lot of people want to live in the Greater Toronto Area—and why not? It’s a world-class city with great neighbourhoods, cultural events, restaurants, and festivals. And with record commute times getting longer and longer, more and more would rather live close to their work. Unfortunately, detached and semi-detached homes and townhouse properties are in short supply.
With the most popular lending rates available at just below three percent and some under the two percent threshold, many first-time home buyers are motivated to get pre-approved for a mortgage before the rates climb higher.
Since a home is probably the largest single purchase you’ll ever make, it’s important to think about your overall financial needs, especially when you consider how much Canada’s mortgage landscape has changed over the last number of years.
The mortgage process, especially for first-time home buyers, can be a long, confusing learning curve. While low lending rates are important, you also need to look at how this investment fits into your overall financial picture; that means setting financial priorities based on your current situation. Are you single, married, or getting married? What are your current debts and future plans? For example, what will your household finances look like if interest rates have gone up and it’s time to renew your mortgage? Is a variable or fixed mortgage best for you? What about the amortization period? Do you want to pay off your mortgage as quickly as possible, or spread it out?
There’s a lot to consider when it comes to finding your dream home. That’s why the licensed, independent trained professionals at Zoo Mortgage are looking out for your best interests, providing you with the best advice for your mortgage needs.
Zoo Mortgage represents you, the customer, and not the lender. Canada’s big banks, on the other hand, are only looking out for their best interests—not yours. That could mean getting you to take out a financing option that doesn’t suit your long-term financial goals, which could cost you thousands of extra dollars.
Not only does Zoo Mortgage take the stress out of the mortgage process, but we also save you time and money. We represent you and ensure the mortgage you get is the one best suited to your specific needs.
With Zoo Mortgage’s access to over 50 of the country’s top lending establishments, we work with a variety of mortgage types and concerns, including purchases, refinancing, home equity takeouts, debt consolidations, and renewals.
It doesn’t matter if the bank is making it difficult to get a mortgage, you’re self-employed, you’re new to Canada, or you have a below-average credit score, Zoo Mortgage will work hard to get you an affordable mortgage.
For more information, contact Zoo Mortgage today and get a free quote and overview of current market conditions or apply online and an independent, licensed Zoo Mortgage agent will get back to you within two days on your mortgage request.
“Canada’s million-dollar housing markets: Look out Vancouver, Toronto’s moving in,” Financial Post web site, May 6, 2014; http://business.financialpost.com/2014/05/06/canadas-million-dollar-housing-markets-look-out-vancouver-torontos-moving-in/.