Is Waiting To Buy A Mistake?
The Toronto real estate market is as hot as ever and prices are skyrocketing as competition only gets more fierce. Bidding wars are common and offer nights can be overwhelming. It’s common to see many buyers opting out and holding off from buying at the moment. But there’s always a cost to waiting.
Why would you want to wait to buy property? Well, there’s plenty of reasons. Perhaps you want some more time to build up your down payment? With Toronto’s average home price flying over $1 million, it can take a lot more time to save up for that down payment. Uncertainty in the market and in the world in general can make plenty of buyers wary. You may want to wait so that you are in a better position or for the market to shift.
But, if you’re waiting for prices to come down in the GTA, you’ll be waiting a long time. March 2021 marked a 16.5% price increase from March 2020. The longer you wait, the higher the prices will rise and you may find yourself priced out of the market completely if you wait too long. Despite others claiming the market will shift, it’s often better to plan for rising prices.
Let’s look at an example.
Using the average home price in Toronto in 2018 and assuming a 20% down payment was required and a 25-year amortization period for the mortgage, the total cost of a home would be approximately $1,255,000. Using the same metrics for Toronto in 2020, the total cost of buying a home was $1,507,900. That’s an extra $252,900 over 2 years.
Now, there’s no right answer of when to buy. But waiting may lead to higher prices. The market is hot and there’s never a guarantee that it will be cool enough to justify waiting to buy. If interest rates change, you may find yourself paying a lot more. Real estate is a hot market in Toronto. A Fridman agent is here to advise you on how to get on top when it comes to buying in the Toronto real estate market.