November was a dynamite month for job creation, with a record 94,000 jobs created, pushing the unemployment rate lower to 5.6%.
Apart from recent increases in interest rates by the Bank of Canada which Tembo predicted in our last blog, a big piece of recent real estate news deals with the rental market in Toronto, which is going through important changes which this blog post will outline.
Prices are increasing significantly
The Toronto Real Estate Board (TREB) just announced that average monthly rental costs for a one-bedroom condo in Toronto hit just under $2,000.00, up 10% from last year. Two-bedroom condos come in at just over $2,600.00 a month on average. Interest rates going up will make borrowing more expensive for first time buyers and will gradually force developers to decrease costs and improve profitability. Affordability will be even less of a concern than it is now.
Rental vacancies at record lows
Low supply of rental units is fuel to the fire of higher and higher prices. The rental vacancy rate in Toronto is around 1%. Many people are being systemically priced out of the city because there are too few affordable rental units left. Condo apartments are out there but getting one is difficult, competitive, and required a solid income.
Government measures aren’t helping
The Ontario Fair Housing Plan was supposed to bring improve the affordable housing situation by protecting existing tenants in the city, instead rental control is proving to hurt supply because developers do not want to build now highly regulated and protected rentals that are not as profitable in the short to medium term as major condo construction is.
Condo market is hot, and supply is insufficient
New legislation and controls from all levels of government will add pressure to developers and will impact supply. Demand remains strong because of a stable economy and higher immigration. All of these factors will continue to affect the supply constraints within the market considerably in a way that adds to the problems.
With the holidays fast approaching, perspective home buyers are writing their dream home wish lists, just as their kids develop their wish lists for Santa. When it comes to buying real estate in Toronto, not all home buyers are able to afford, nor do they want to carry the mortgage on the home that “has it all”. In these cases, cosmetic and/or stylistic dreams are compromised in order to find the best and most suitable home for you and your family. What compromises should you be looking to make? We’ve provided a short list of some of common misconceptions and believed “necessities” for you to cross off your list.
“I need to live in a detached home” – When purchasing a home, especially when it comes to first time home buyers or those looking to expand with their growing family, a detached home sometimes seems like the only way to go. However, Toronto offers many other similarly suitable options, such as semidetached homes, which on average sell for $100,000.00 less than a fully detached home. Keeping your search open to stylistic changes such as these can mean more money for renovations or upgrades in the future, or for more savings long term.
“We need more space” – Do you really? Although having an extra bedroom, or a second living room does seem like a great addition to a home, what do you plan on using it for? Could you use another room for dual purposes, or convert a shed/garage/attic into your extra space? By imagining the purpose behind these wish list items, you are able to understand if it’s truly something you need, or just a nice-to-have you could live without. Another bonus, less space = less cleaning.
“The house should be fully upgraded and finished” – This decision can be a tricky one, as buying older homes sometimes means that many of the aesthetic finishes throughout are old or outdated. However, if location, style, and size are higher priorities on your list, keep in mind that upgrades and new finishes can be changed with time. By giving yourself a home that needs a little more TLC, you’re opening yourself up to the ability to stay within budget, renovate as time and funds permit, and giving yourself more control over the final outcome of the home. This sense of control and personal validation once completed is definitely something to consider, especially for those who would initially reject an older or outdated home.
Have you sold or are in the process of selling your home, and now can use an advance on your equity before closing day, perhaps you need money for your new purchase deposit? Or to fund your renovations before sale? Tembo Financial can help! Tembo offers this unique service to homeowners in Ontario and the GTA. You could receive your money in as little as 48 hours with no credit check and no appraisal* for expenses that matter to you. Don’t wait, start today!
*Subject to qualification.
Saving for a home with cash now takes double the amount of time today as it did in the 1970s in terms of weeks of labour. This was found by the Broadbent Institute who determined that it takes about 400 weeks of labour to purchase the average residential home in Canada, compared to less than 200 weeks in 1970. This means that current and recent homebuyers need to dedicate more time in saving to buy a home. According to the same study, in 2015, 400 weeks of labour in terms of cash cost needed to buy the average Canadian house was almost eight years worth of labour time.
Have you sold your home, and now can use an advance on your equity before closing day, perhaps you need money for renovations? Tembo Financial can help! Tembo offers this unique service to homeowners in Ontario and the GTA. You could receive your money in as little as 48 hours with no credit check and no appraisal* for expenses that matter to you. Don’t wait, start today!
*Subject to qualification.