Toronto Condo and Real Estate Blog

One thing is for sure - we all know that we need a roof over our head. In most people’s case they end up having to pay either rent for this roof or a mortgage payment, unless of course you have a rich family that can offer you FREE RENT. Yeah right…

The point is, we ALL have to pay for a roof over our heads.

Real estate has always been considered a long-term investment. The real question you need to ask yourself is whether you really want to pay rent for the rest of your life? Generally, a home makes financial sense if you are going to live in it for at least three, four, or preferably five years. When you buy you need to take into consideration the costs involved in buying and selling a home, from appraisal fees to home inspection. All must be taken into consideration.

When people lose money in the real estate market it is usually because they did not own it long enough, they sold to quickly. This usually means within the first 3 years of the purchase. You cannot depend on making any real profit in real estate in the first 3 years. In fact, the market may decline shortly after you buy your home. However, you have to keep in mind the longer you own your property, history has shown us, you can be sure it will have increased in value when you come to sell.

Real estate has proven to be one of the most stable long-term investments there is. It is your guarantee of retirement security. Overall, it is far better to own your own home than rent. Not only for the pride of ownership but because it is your only long-term hedge against inflation. With rental rates increasing constantly, there is no guarantee you will be able to afford them as the years go by.

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Buying your first condo can feel intimidating at first, but the process is actually pretty straightforward. Your real estate agent, lawyer and bank representatives will guide you, so choose them wisely and don’t be afraid to ask questions.

Get what you want: Before you start looking, make a list of your priorities. Consider approximate size, number of bedrooms/bathrooms, location, price, amenities and how soon you want to move. Check out the “Condominium Buyer’s Guide” on the Canada Mortgage and Housing Corporation website (http://www.cmhc-schl.gc.ca), which offers an overview of the buying process and a checklist to help you rank your priorities.

Stay focused: Even the thriftiest shopper can lose perspective when dealing in six-figure amounts. What’s another $5,000 when you’re already spending $250,000, right? Well, with interest, it’s quite a lot. Know what you can afford - it’s a good idea to get pre-approved for your mortgage - and stick to your budget.

All the world’s a stage: Whether you’re looking at model suites or resale condos, be aware of the staging that’s been done to make the space more appealing - everything from the art on the walls to the bowl of fresh limes.

Remember, it may be no coincidence that your favourite magazines are carefully fanned out on the coffee table. Don’t get suckered in by superficial details.

Know where to shove it: Storage space may not seem as exciting as a gourmet kitchen or a wrought-iron spiral staircase, but when you’re about to squeeze your whole life into a 700 square foot condo, it’s important that there’s room for your prized possessions.

Check out the closets, find out whether a locker is included (or available for purchase) and think realistically about where shelving could be added.

Go with your gut: Finding the right condo is like finding love: If it’s meant to be, sparks will fly. Conversely, if the first 10 places don’t float your boat, keep looking.

If something bothers you a little on first sight, it’ll bother you a lot when you live there. You shouldn’t have to talk yourself into a $200,000 purchase.

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Contact the Jeffrey Team for more information

RBC Economics releases second quarter report

Canada’s housing affordability improved in the second quarter of 2005, according to the latest Housing Affordability Index released by RBC Economics. A dip in mortgage rates to multi-year lows offset higher house prices in most regions.

“For the most part, affordability improved in the second quarter across Canada with Alberta, and to a lesser extent Saskatchewan being the exceptions,” said RBC economist Allan Seychuk. “Affordability probably looks as good as it will get in the near term as mortgage rates are on the rise.”

The RBC Affordability Index, which measures the proportion of pre-tax household income needed to service the costs of owning a home, stands at 25% for a standard condo. The condo remains the most affordable housing type. A standard townhouse is the next most affordable at 28.7% and had the largest improvement in affordability in the second quarter of 2005.

A detached bungalow took up 36% of median pre-tax income, while a standard two-storey home remains the least affordable with an index reading of 41.8%. RBC’s Affordability Index for a detached bungalow for Canada’s largest cities is as follows: Vancouver 55.3%, Toronto 42.1%, Montreal 34.3%, Calgary 32.8%, Ottawa 32.1% and Edmonton at 27.6%.

RBC notes that Ontario posted some of the largest gains in affordability while Atlantic Canada’s improvement was marginal. Even in British Columbia, where house prices are rising rapidly, ownership costs became easier to bear in the second quarter thanks to strong income growth and lower borrowing costs.

Affordability improved across most regions of Canada in the second quarter of 2005. Alberta was the notable exception as house prices accelerated sharply and offset the positive effects of lower interest rates, making it the only province to suffer an across-the-board deterioration in affordability. Saskatchewan experienced the same, but only for smaller homes. Atlantic Canada remains the country’s most affordable region based on the benchmark detached bungalow.

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Contact the Jeffrey Team for more information