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The Dream of Home Ownership isn’t Dead — It Demands More Creativity

Written by Posted On Monday, 29 July 2019 12:03
The Dream of Home Ownership isn’t Dead — It Demands More Creativity

Millennials have grown accustomed to being on the receiving end of bad news — topics such as debt, environmental degradation, and affordable housing have been raised as challenges for the entire generation.

In Toronto, home ownership has been a hot button issue for Millennials: There are nearly weekly reminders through various publications that homeownership is impossible or that prices are too high for all except the most affluent buyers. The truth; home ownership is still an achievable goal, but it requires a new way of thinking.

The New Starter Home

Based on data from TREB, the average price of a home in Toronto rose to $832,703 in June of 2019, an astoundingly high price for young professionals who are just beginning their careers: numbers like these make It hard to imagine a time when a young couple in their 20s could purchase a large single family home in the suburbs. But there was such a time.

Looking back to 1971, the average cost of a home in Toronto was just $30,426; granted, inflation would swell that number to roughly $200,000 today, but that would still be ¼ of the price of a home in Toronto in 2019. If those numbers seem intimidating, you’re not alone.

In fact, single family homes in the GTA are so in demand that they’re simply not an option for most first time homebuyers; condos have become the new starter homes for many young buyers who see entering the market early as an opportunity to own a house down the line. Unfortunately, some of these buyers quickly learn that condos in their neighbourhoods of choice can be just a pricey.

That can be a harsh dose of realty for anyone who’ve accepted they cannot afford a single family home and have focused in on Yorkville condos or condos in another desirable area. To succeed in this competitive market, one needs to look outside of the traditionally desirable neighbourhoods.

Picking the Right Neighbourhood

If you have a restrictive budget and you want to beat the competition, you have to search where the competition isn’t looking. Of course, that doesn’t mean landing in a bad neighbourhood or an area with no future prospects. One interesting way to spot an up and coming neighbourhood is to look at upcoming transit projects.

On Strata’s blog, we’ve written a post about how the King Street Pilot Project becoming permanent would give a boost to condos in the area; we believe this, because there’s a mounting body of evidence suggesting a link between rising property values to public transportation projects; as covered by The Star and others.

Another tactic is to watch new developments going up in a neighbourhood — whether it’s a shopping centre, new restaurants, or even a new condo building. Regent Park in Toronto has been the site of a rebranding leading to several new businesses coming to the area, which has resulted in large gains for investors: for example, the price per square foot at One Park South Tower has almost doubled since 2014.

Naturally, crime statistics can be valuable in searching as well; however, it’s important to understand that some neighbourhoods have been targeted by bias, and these rates can and do change.

Planning Ahead

Buyers who are seeking to enter the market and want space to raise a family, would be wise to buy in traditional condo buildings in lesser known areas: As of this writing, there are 1200 square foot condos for sale in buildings such as Lawrence Avenue Condos, selling for a little over $300,000.

Those who are looking to stay for a shorter term and want to maximize their profit, might opt for a newer build such as Hearthstone by the Bay Condos in Mimico. Prices here are comparable to those at Lawrence Ave E, but floor plans are considerably smaller. However, with Mimico’s close proximity to downtown Toronto, property values would likely appreciate faster in this area.

These are only a sample of the options available to first time home buyers, the common denominator being that they’re outside of areas that are traditionally desirable. Media tends to focus on downtown Toronto when breaking the bad news about real estate prices, but for those who are willing to go a little further, ownership is still a very real possibility.

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Robert Van Rhijn

Robert Van Rhijn is a Toronto based Realtor and Broker-of-Record at Slate Realty Inc. He founded Strata.ca in 2018 — a Toronto condo website featuring data and analytics you don’t need to be a statistician to understand. You can connect with Robert at robert@strata.ca.

https://truelofts.ca/

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