As much as we would love to say otherwise, buying or selling a house in Etobicoke does not seem to be getting easier. This may be disappointing news for anyone who has been waiting for prices to drop significantly before getting into the market.
First-time buyers may have it the most difficult of all. With no existing equity to bolster their purchasing power, the stringent down payment requirements and monthly carrying costs can be insurmountable. That said, we can make a strong case that anyone who could buy a home now – should buy a home now. In this post, we’ll explore how and why you want to consider getting into the market sooner rather than later.
Did you know that we have a comprehensive guide just for first-time home buyers? Download your copy for free right here.
Look at the History of Etobicoke Real Estate
A glance at the historical prices of real estate alone should be enough to inspire anyone to take action and start looking for their first home. Over time, housing values rise and fall, but the long-term outlook is always up, even considering the down markets of 2008 and 2017.
After the unprecedented growth during the pandemic, many people predicted that prices would take a tumble. However, all we have really seen is a market correction. As the population of Toronto continues to climb, we can expect housing prices to increase even more, especially when the supply is not keeping up with the demand.
Buying a house may seem expensive, but waiting may cost you even more if you choose to rent anywhere in Toronto. Keep in mind that landlords are permitted to raise the rent each year, and they will as their own expenses increase. A home of your own protects you from the rising costs of buying and renting.
Getting up-to-speed with the current market is a great first step to buying an Etobicoke home. You’ll find plenty of timeless advice in the posts below:
- Real Estate Jargon-What It Really Means
- Know the Real Estate Cycles and Hack the Market
- Is It a Good Time to Buy or Sell a Home in Etobicoke?
Waiting May Not Make Sense
When first-time buyers tell us they are on the fence, one of our first questions is, “What are you waiting for?” Sometimes, the answer is tangible, such as saving up for a down payment or trying to become more established in a career. Often, however, the reason is vague and undefined.
There can also be fallacies or misconceptions about the market holding you back. For example, you may have always dreamed of owning a four-bedroom detached house in a highly desirable neighbourhood. Try as you may, you just can’t imagine living in a one-bedroom condo. In any case, it’s important to be realistic, especially when it comes to your first home.
The sooner you get into the market – in whatever way you can – the sooner you can build your equity and purchasing power. Think of it another way. Saving up an extra $100,000 or more over the next five years might be impossible through your place of employment. However, your property could very well appreciate in value that quickly. When you’re ready to upgrade, this increased equity will help cover the costs of a larger home.
Getting the best possible value is critical for first-time home buyers. The posts below can help:
- How To Tell If Your Dream Home Is A Money Pit Or A Worthwhile Investment
- What Will It Really Cost to Buy a House in Toronto?
- How Not To Overpay For Your New Home
You Have More Options Than You Realize
For some people, buying a home can be an intimidating process, especially if you’ve never been through it before. When feeling overwhelmed, it’s a good idea to weigh the pros and cons of owning a house. If the list of pros is longer and you have the ability to proceed, now is an excellent time to take that first big step.
Next, take a look at what you will need to purchase a house and what resources are available to you. Imagine you plan to buy a condo priced at $500,000. At this price, you need 5% (or $25,0000) upfront. Though this is the lowest possible down payment you can require, it still seems like a lot of money.
You also need to factor in any closing costs before you can take possession of your new condo. Where will all of these funds come from? Here are a few resources for first-time home buyers that can help make your purchase more accessible.
Government Programs and Rebates for First-Time Home Buyers
The federal Home Buyer’s Plan allows you to withdraw as much as $60,000 to put toward your purchase. If you repay these funds within 15 years, you’ll have no tax penalty and will have time to recover any lost profits for your retirement.
The First Home Savings Account is a relatively new program where you can save money in an investment fund to buy a house. You can contribute up to $8,000 per year to a lifetime limit of $40,000. When you’re ready to buy, you can pull out the entire amount, including any investment income you have earned, to cover your down payment.
Land transfer taxes are one of the most substantial closing costs for all home buyers. However, you can take advantage of first-time buyer rebates to reduce your burden significantly. The provincial land transfer credit can save you $4,000, while the municipal program covers $4,475 for a total reduction of $8,475.
The First-Time Home Buyer Tax Credit allows you to claim $10,000 the following tax year. This credit will reduce the amount of tax owing and could even result in a refund for the year.
Are You Ready?
The truth is that very few people ever feel completely ready to buy that first home. The question is whether or not it makes sense for you. If you have the resources and plan to stay in Toronto for a long time, buying real estate can pay off, and not just financially. Once you have the satisfaction of turning the keys in a place that is truly your own, you may wonder why you didn’t act years ago.
Are you ready to take the first step to breaking into the Etobicoke real estate market? Our local experts are here to guide you all the way. Connect with us today at 416-450-5900 or email contact@thompsonsells.com with any questions.
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