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Buying a House in Toronto: Will It Get Less Expensive This Year?

The Greater Toronto Area (GTA) housing market is finally starting to look more optimistic in pricing relief going into 2022 and 2023. That said, challenges like inflation and a low inventory will throw their respective wrenches into buying plans. Countering this with knowledge about exactly what the upcoming home price vulnerabilities are, and how to navigate them, is what can make your dream come true of buying a house in Toronto.

 

Buying a House In Toronto - The Good

The crazy high prices of 2021 are expected to slow way down in early 2022 and into 2023, which is a good thing. The Canadian Real Estate Association (CREA) is optimistic that prices for homes for sale will not rise drastically in 2022. Whereas house prices rose by a whopping 19.9% in 2021, the housing cost increase in 2022 is forecast at 5.6%.

So the overall result is that the ceiling on sky-rocketing Toronto house prices has been reached for now. Real Property Solutions (RPS) asserts that Canada's housing market will calm down in prices for most of 2022. The reason is a gradual increase in interest rates expected from 2022 and beyond that will help pressure sellers to ease up on asking costs.

Inflation and Overvaluation - The Bad

The GTA won't have as strong pressure to lower housing costs as some other Canadian real estate markets though, due to Toronto homes being so overvalued. On top of that, the inflation rate at 4.1% is the highest in Canada since 2003. Inflation eats into income needed for mortgage payments and in 2021 the typical Toronto home cost 10 times more than the average family's annual salary.

But don't despair as the news is far from all bleak for Toronto home buyers! The positive here is that the GTA's economy has largely bounced back after the COVID-19 lockdowns. There are indeed many buyers looking for Toronto area houses.

Supply and Demand - The Ugly

Toronto currently suffers from a low housing inventory, and it's a major element that drives prices upward. Moody's Analytics recently reported that new construction is expected to help Ontario's housing shortage and estimates that a million homes are needed in the province over the next decade. That's welcome news as the buyers' demand for Toronto homes isn't expected to lessen anytime soon.

Also, the competition for buying average houses is likely to increase as the demand for luxury homes decreases, so choosing the right neighbourhood is crucial as the area can make a difference as it did in pricey 2021. House costs overall were highest in Brampton, King, Markham, Toronto Central, and Whitchurch/Stouffville. Lower home costs were generally seen in Bradford, Brock, Burlington, Halton Hills, Innisfil, and Milton.

 
Moving forward, the bottom line for home buyers is perseverance and expert knowledge of pricing comparisons of sold homes (housing comps to us in the real estate biz). For the most up-to-date Toronto house buying info and which neighbourhoods are the best and least expensive, call Nancy at 416-985-1486 or Dave at 416-894-4079 at GTASelling.com.
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PROPERTY CRUSH

The Property Crush this week is our own listing at 68 Armadale Ave., Toronto


Captivating restored, light filled, open concept, stone cottage, nestled in the heart of Bloor West Village, surrounded by beautiful native gardens intermingled with stone pathways. 


Sky-lit entrance with a marble floor opens into flowing hardwood floors throughout the open concept home. The chefs kitchen with granite top island and high end appliances is a pleasure for cooking and entertaining as it opens out to a stone patio combined with a comfortable lounge seating area. The sun drenched sunken living room boasts 12 skylights, vaulted ceilings and a floor to ceiling stone fireplace. A floating staircase rises to second floor bedrooms with eastern morning light and overhanging trees which are home to beautiful songbirds that transport you to a rainforest like environment. Downstairs has a large living area, a spa-like bathroom and is ideal as a suite for an adult child or long term valued guest.  A tankless hot water system, with modern slim radiant wall heaters provide the most comfortable heat, while being very energy efficient.  All bathrooms have heated floors. There is a single car garage, plus 2 car parking. Relax after work, with western sunset exposure, on the private deck above the garage. Hot tub and pergola included. Steps to Bloor West shops, bistros and TTC. Location, location, location!

68 Armadale Ave., Toronto, Ontario Canada


List: $1,980,000

 

Listed by: Nancy Pierce and Dave Duncan, Salespersons, Re/Max Professionals Inc., Brokerage

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How to Choose the Best Toronto Realtors for Your Sale or Purchase

Finding a high-quality realtor in Toronto, GTA, or Etobicoke can be utterly overwhelming. If you're nervous about finding a great realtor to help you sell or purchase a home, read on to discover how you can find the best Toronto realtors. 

 

How to Choose the Best Toronto Realtors for Your Sale or Purchase

The Best Realtors Have the Best Teams

There's no better way to determine the quality of a realtor than to look at the professionals that surround them. An excellent realtor makes their team a priority and will align themselves with a highly skilled crew of industry professionals. From home staging consultants, videographers, and photographers, to lawyers, lenders, contractors, and beyond, a worthwhile realtor will always come with a great team and an unmatched wealth of industry resources.

Finding a Quality Realtor to Sell Your Home

Houses don't sell themselves - don't trust anyone who tells you that simply listing your home will result in the highest possible price. A top quality realtor will have a selling strategy, marketing tools, and more to help showcase your home to serious buyers. Make sure to ask any potential realtor questions about staging, marketing, pricing, and strategy - and check their website to see if they're confident using social media and online strategies for selling as well.

You can tell a lot about a potential realtor by looking at their online listings. Are they using professional photos? Do they have video tours, slide shows, and floor plans available? A great realtor will have a well-designed website showcasing their client's homes to a broad, quality market of buyers. Attending an open house hosted by an agent you're interested in working with will also give you an idea of the treatment your home will receive by a realtor!
 

Sourcing the Best Realtor to Purchase Your New Dream Home

When looking for a home, it's a great idea to find a realtor who regularly works in your desired neighbourhood. The expertise and experience a neighbourhood pro can deliver to you will save you headache and hassle. When your realtor really knows a neighbourhood, they will have a clear grasp of the values of its homes. This means you can easily assess which properties are suitably priced for your needs and budget before you even start searching for your new home.
 

Hire Experience and Expertise

Be suspicious of realtors who work part-time or who have second jobs; if you're serious about buying or selling your home (and you should be!), you want a realtor who is equally serious about their job. Look for full-time, full service agents with positive customer testimonials and proven sales experience. 
 
An excellent real estate agent aims to provide peace of mind to their clients by using the skills of their highly qualified team, vetted marketing strategies for making sales, and hands-on experience to deliver maximum client satisfaction. Are you looking for an experienced realtor to help you buy or sell a home in Toronto, GTA, or Etobicoke? Call Nancy at 416-985-1486 or Dave at 416-894-4079 at GTASelling.com.
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What Is the Normal Term of a Mortgage in the Toronto Area?

With the way Toronto home prices are today, it's more important than ever to carefully consider the term of your mortgage before purchasing a house. If you're not sure what mortgage terms are or why they matter, don't worry! We'll go over the way they work and how they impact your purchasing decisions. We'll also look at why amortization periods matter and offer some basic advice on how to decide on a term based on your circumstances.

What Are Normal Mortgage Terms in the Toronto Area?

The time frame of a mortgage can be anywhere from 6 months to 10 years. However, most mortgages in the GTA consist of a 5-year term with a 25-30 year amortization period.

What's the Difference Between Terms and Amortizations?

Although commonly confused, terms and amortizations are two different things. Here's a breakdown of what each term means.

Term

The term of your mortgage is the extent of time you commit to the mortgage rate, lender, and associated conditions. You can pick from a variety of different lengths ranging from short to long-term mortgages.

Your bank will set out a repayment schedule, which is usually billed on a monthly basis. The total amount you borrow, the total interest you pay, and your monthly payments remain constant throughout the term.

Amortizations

The amortization period is the total life of your mortgage. It is the number of years it will take to repay the entire loan and any outstanding interest at normal scheduled payments.

The amortization period will impact how much principal and interest you repay over the term of your mortgage. This means that while some people choose the term of their mortgage based on the monthly payment, choosing a shorter amortization period can save thousands in interest when you consider all of your payments over the life of the mortgage.

What Is the Right Term Length for Me Based on Toronto Home Prices?

If you're wondering what the right term length is, the answer is: it depends. The best way to figure out what term length works for you is by getting pre-approved and talking to lenders. Here are some other factors to keep in mind when choosing a term:
 

Your Employment Status

If you're planning on switching jobs or know that your income may fluctuate (e.g., freelance work), then a short-term mortgage can work better for you. That way, you won't be locked into a term for too long when you don't know what kind of income you'll be making in the future.

The Stability of Your Job: 

If you expect to be at your job for the next few years, you may want to go with a long-term mortgage. This way, you can lock in a predictable rate for the foreseeable future.

Your Financial Commitments: 

Do you have other types of debt? For example, are you planning on making any other large purchases soon, like a vehicle? If so, then a long-term mortgage might work out better so you can balance lower monthly payments with your other bills.
 
The difference you pay between short-term and long-term mortgages can be significant, so it's important to choose the best term for your circumstances. If you have any further questions about terms and amortizations, we're here to help! Call Nancy at 416-985-1486 or Dave at 416-894-4079 at GTASelling.com and we can help determine the option for you!
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Is the Toronto Housing Market Currently in a Bubble?

The housing bubble in Canada has been a topic of concern for so long that it even has its own Wikipedia page, and the Toronto housing market is no exception to this. While there is a lot of good information out there, there is also a lot of hysteria. Ultimately, nobody can predict the future, but with experts and investors pouring huge amounts of time and effort into understanding what is going on, there are some questions that we can answer.

Is the Toronto Housing Market Currently in a Bubble?

The Basic Facts

At a glance, the statistics on property prices in Toronto are pretty astonishing: prices have risen by an average of ten percent a year over the last five years, including their 18.1% rise this year. In other words, a condo that cost $620,921 in 2016 would now be valued at $1,000,000. Little wonder that it now takes an average of 27 years of savings to buy a house there.

What Are the Experts Saying?

Most major institutions and commentators agree: this is a bubble. In May, the Bank of Canada named the housing bubble as the bank's main concern regarding the Canadian economy, pointing particularly to Toronto and the Greater Toronto Area (GTA). Likewise, Swiss Bank UBS rated Toronto among the three biggest housing bubbles in the world in October 2020.

Why Do They Think This?

With the aforementioned incredible growth of house prices in Toronto, it was inevitable that the stability of this growth should be questioned. However, the conditions under which this growth has taken place are what really concern the experts.

Fundamental Market Forces Analysis

It is often argued that a bubble can be identified when changes in fundamental market forces cannot explain a price rise. In the case of Toronto, an analysis of market fundamentals suggests that prices should have risen by 12% since 2014 when in reality they rose by 93%. Given the vast difference between market fundamentals and reality, it seems likely that the reason for the increase is a bubble.

Supply and Demand

One reason why prices might rise so suddenly is demand massively overwhelming supply, causing prices to rise for what little is available. However, over the past six years 230,210 "dwelling units" have been constructed in Toronto, so it is clear that supply is not an issue. It is therefore reasonable to assume that prices are rising because people expect prices to rise further, and are therefore hoping to sell later for a higher price.

That is a classic symptom of a bubble: a conclusion strengthened by the fact that, while house prices rose in the GTA as a whole, the average price of a house in Toronto decreased from May to August. In other words, Toronto was too expensive for most. When that happens, the prices are almost certain to go back down in order to be affordable.

Does Anyone Disagree?

Very few people. Those that do so point to the continued demand in the area and attribute this to Toronto's growing reputation as a tech hub, accelerated by the arrival of Alphabet's (Google's sister company) Sidewalk Labs. They also suggest that red-tape affecting new developers causes a lack of supply relative to demand. However, in the face of the evidence discussed so far, it is not surprising that this opinion is not commonly held.

To discuss buying or selling in Toronto, call Nancy at 416-985-1486 or Dave at 416-894-4079, or visit GTASelling.com.
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PROPERTY CRUSH

Wow! We love the zen feel of this magical property - utilizing large windows to showcase the beautiful outdoor surroundings. From the picturesque pond views to the modern interior features - this home is the ultimate in unique luxury living. 


7825 19th Sideroad, King, Ontario Canada


List: $4,800,000

 

Listed by: Khalen Meredith, Broker, Sotheby's International Realty Canada, Brokerage

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