Justin James Raju, a realtor and mortgage broker with Dominion Lending Centres Canada Mortgage Group, told REP that year-over-year housing price increases should be enough to influence buyers to purchase a principle residence as soon as possible.
“The average price in the GTA is $475,000 and if you don’t buy today the price may jump in the next few years so buyers should buy within their means in the market they want to live in.”
Within the GTA – and, in Toronto in particular, affordability is quickly deteriorating, according to the Canada Mortgage and Housing Corporation.
“In these markets, owning a single-family home has become quite a stretch, budget-wise, for the ‘average’ homebuyer,” the crown corporation’s latest affordability report says.
Guy Lew of the Mortgage Centre told REP that several first-time homebuyers are instead investing in less expensive markets to build capital that can later be put against an expensive home.
“[First-time homebuyers] are trying to build $150,000 - $200,000 to put toward that house so what they will do is sacrifice home ownership for a year or two to build the capital in the rental market,” he said. “They’ll look at, say, a house for $250,000 in Barrie.”
First-time home buyers are putting off purchasing a principle residence in favour of first buying investment properties in cheaper markets, but some experts believe this isn’t the best move.