With the average selling price of homes in Toronto hovering around the $1 million mark since the summer, the idea of buying in the city is becoming unrealistic for many, particularly those looking to get into the market for the first time.
Then you have to take into account that number is for detached houses, townhomes, and condominiums combined – if you are in the market for a single-family detached home, expect to pay around the $1.3 to $1.5 million mark.
Faced with that reality, an increasing number of buyers are choosing to move out of Toronto and the Greater Toronto Area when looking at potential cities to purchase in.
Crossing City Lines
Long-time Zoocasa agent Carlos Moniz has certainly noticed that more and more of his clients are deciding to head to the suburbs to find better value.
“Toronto is no longer affordable to many, so people are choosing to move further out,” he says. “When I sit down with a first-time home buyer and we come up with a budget and what they can get approved for, typically it is a $500,000 to $600,000 budget. Most people are open to anywhere within an hour of the city.”
What to Consider When Buying a Suburban Home
Buying a home, particularly your first one, will likely be the most important purchase you make in your entire life. For that reason, it’s not a decision to be taken lightly, so a great deal of thought must be put into what choice you make. There are certain signs to assess if you are buying in an area where property is likely to appreciate in value, however, as Moniz explains.
“You always want to follow where the money is being spent,” he says. “Where are big developers starting new projects? Where is the government building new transit? Where are new stadiums or new shopping centres being built? The 407 is getting expanded across the east end, and the GO Train too.”
Transit Access A Big Buyer Draw
Public transport is something Canada does not compare favourably with in comparison to many other developed nations. Thankfully, that is changing, particularly in the GTA where highway gridlock means the need for alternatives is pressing.
“Toronto is not great for public transport,” says Moniz. “I live in Etobicoke and I have friends in Pickering that can beat me downtown because they are on the GO Train. I am part of an investment group and they pegged the increased value to a home near the GO train at 14%.”
Consider the Location of Your Investment
With most homes in Toronto hovering around the million-dollar mark, it is pretty difficult to find good investment opportunities in the city. If the goal is to buy low and sell high, it’s unlikely you will be able to fulfil the first part of that mantra in Hogtown. Looking further afield does offer value though, and one city in particular is making somewhat of a comeback after decades of neglect.
The Booming Golden Horseshoe
“Hamilton is the number one place to invest in all of Canada and a lot of that stems from affordability,” says Moniz. “The average price really depends on the neighbourhood there. Downtown Hamilton is the cheapest, but not the most desirable. They are putting the LRT through the downtown core though, and there is job growth. They are trying to expand the airport too – there are a lot of tell-tale signs of how it is changing, but it will take some time.”
Hamilton townhomes, condos and detached houses are definitely benefitting from the hyperinflation with Toronto’s property prices, but it is far from the only option for prospective home buyers. Whether it is north, south, east or west, new developments are springing up all the time.
“People are much more open to the suburbs now than they were in the past,” says Moniz. “The 407 being extended means Bowmanville is a great area to invest in right now. There are lots of new developments there right now. ”
He adds: “The other place I have clients buying north of the city that has lots of new developments is New Tecumseth. Bradford too – areas that people were not necessarily buying in before, but they are now.”
Published: December 27, 2016
Last Updated: December 15, 2022