If you are planning to buy a home in Toronto, you better start with an aggressive savings plan. The average price for a detached home in Toronto has skyrocketed to $1,257,958 marking an 18.9 per cent increase from the same time last year.
The Toronto housing market is rising quickly and some analysts say it is coming closing in on the market levels in Vancouver. The Toronto Real Estate Board says the average price for a detached home in Vancouver is more than $1.8 million.
“With the average price of homes rising in Toronto, many Canadians have to be mindful to not get caught up in emotions and spend beyond their means for their dream home,” says Jeffrey Schwartz, executive director, Consolidated Credit Counseling Services of Canada.
And for some first-time homebuyers, the Toronto housing market is pushing their budget beyond its limit.
“As we move into the busiest time of the year, in terms of sales volume, strong competition between buyers will continue to push home prices higher,” says Jason Mercer, director of market analysis, Toronto Real Estate Board in a statement.
If you are in the market looking for your dream home, Consolidated Credit offers some tips to help you:
- Do not only focus on your mortgage payment. There are many “sleeper costs” with owning a home. To avoid being caught off guard, create a well-rounded budget which includes property taxes, household repairs, an emergency fund, utilities, mortgage payments etc.
- Hold off on making any big purchases three to six months prior to buying a home. Financial institutions want to ensure you are a client they can trust. Just like your annual physical, strive to be financially healthy.
- Do not compete with the Joneses. If housing prices in Toronto are too high for you, consider renting or find a home in the suburbs. It simply does not make sense to buy a home you cannot afford.
- Consider why you are buying a house in the first place. If owning a detached home in Toronto is out of your grasp consider purchasing a condo or even renting. If you choose to buy a condo instead, be mindful of the maintenance fees. These fees can increase on an annual basis.
- If all else fails, delay entering the housing market until you can afford a home and start saving for it. You will need money for such expenses as your down payment, home inspection and closing costs.
If you are currently living beyond your means and you are worried you will never be able to buy a home, give us a call. One of our trained credit counsellors can review your financial situation and help you. Give us a call at 1-888-294-3130.