A recent poll from Toronto-Dominion Bank documented this willingness to buy homes in the suburbs, a small town or a rural location. Urban living was the top choice at 33 per cent of surveyed millennials in 2018, compared with 38 per cent in 2015.
TD found that the big draws for living outside the city for millennials are increased outdoor space, larger living areas and better affordability. The affordability advantage is big in the suburbs, just like the yards.
According to March data from the Toronto Real Estate Board, the average saving on housing of all types is 25.4 per cent when you leave the city proper, known by its 416 area code, and move to the surrounding areas known by their 905 area code. Here’s a breakdown:
- Detached homes: Averaged $910,624 in the 905, 28.2-per-cent cheaper than the average cost of $1,267,598 in the 416.
- Semi-detached homes: Averaged $680,501 in the 905, 33.3-per-cent cheaper than the average $1,020,561 in the 416.
- Townhouses: Averaged $617,226 in the 905, 16.8-per-cent cheaper than the 416 average of $741,881.
- Condos: The 905 average was $463,774, 23.2-per-cent cheaper than the 416 average of $603,969.
Cheaper homes mean smaller mortgages and lower monthly payments. Toronto’s average detached house price in March means a stunning monthly mortgage payment of $5,058 if you assume a 20-per-cent down payment and a five-year fixed rate mortgage at 3.49 per cent.
The condo apartment market in the Greater Toronto Area remains tight with prices facing upward pressure.
The Toronto Real Estate Board says that GTA Realtors reported 4,731 condo sales through the MLS in the first quarter of 2019, down 6.1% compared to the same period of 2018.
Listings saw a 2.4% rise year-over-year, adding 8,222 to inventory.
“While we experienced a slightly better-supplied condo market in the first quarter of 2019, the market segment remained tight enough to retain the highest year-over-year rate of price growth compared to other major home types,” said TREB president Garry Bhaura. “Condos continue to provide prospective buyers with a relatively affordable housing option in the GTA, especially given the impact of the OSFI-mandated mortgage stress test.”
The average price of a condominium apartment increased by 4.5% from $533,520 in Q1 2018 to $557,377 in Q1 2019.
Year-over-year price growth in the City of Toronto, which accounted for 69 per cent of transactions, was slightly higher at 5.4% resulting in an average price of $603,243.
Completions down in Q1
The slight increase in condo apartment listings could be reversed in Q2 with CMHC stats showing a rise in new condo completions at the end of 2018 but a fall in Q1 2019.
Sales could therefore be lower in Q2 and the tight rental apartments market will see further rent hikes.
“The condominium apartment rental market remained very tight through the first three months of 2019. Average one-bedroom and two-bedroom rents were up well-above the rate of inflation on a year-over-year basis in the first quarter. However, the condo rental market also benefitted from an increase in the number of units listed, resulting in more choice for prospective renters. With this said, we would need to see a number of quarters with listings growth outstripping rental transaction growth in order for the market to become more balanced,” said Jason Mercer, TREB’s Chief
Blogger’s view: If your family is growing and looking forward to family oriented life-style, suburbs is a good way to move. Condo market is good for 1st time buyer, investor or people in career building life-stage. Bottomline is to get into the market somewhere you feel comfortable and you may work your dream home all the way in your life-time with a good Real Estate Consultant.