Preparing yourself to buy a condo can seem daunting! Mortgages, down payments, different neighbourhoods, and what the heck is going on in the market are all things you're thinking about right now. Luckily we've got you covered. With the year coming quickly to a close it seems, we wanted to help you get prepared for buying a condo in 2018.
Here are 3 things that you should prepare yourself for in the coming year.
You'll likely be able to afford less
As we ring in the new year we are going to be ringing in some new mortgage rules too. If you're putting down under 20% these new rules aren't going to impact you, but if you're someone who's been saving for years to have a 20% or more to put down... this is going to impact you big time.
The new rules are going to include a stress-test for those putting down 20% or more. This will obviously impact how much money you can borrow to purchase your condo. It's best to speak with a Mortgage Broker now to figure out the ABC's of your situation.
A Mortgage Broker will be able to let you know what you are eligible for right before January 1st, 2018 and after January 1st, 2018. The average person is going to see their budget slashed about 20%, so keep that in mind if you got a pre-approval in the past, as your maximum purchase price will be changing come the new year.
Pick the right area for the long-term investment play
If you're thinking about buying a condo in 2018 DON'T buy in the hottest neighbourhoods like King West, Leslieville, Yorkville, or other current hotspots.
These neighbourhoods are obviously great and offer an amazing lifestyle to those that call them home, but if you're looking to have your property appreciate more in value, you'll want to focus on the up-and-coming pockets of the city for condos.
This doesn't mean giving up the urban lifestyle or living in a bad location, it might just mean you don't have all the trendy restaurants on your doorstep or 5 Starbucks within 3 blocks (but a brand-new Starbuck's opening in the area is probably a good thing). Our team of condo experts can help you spot the up-and-coming pocket that's right for you.
Shortage of Good Units
If you're looking for the best of the best, be prepared to pay for it in 2018. Our prediction is that the best units will still get top-dollar. If you're looking for a larger condo (2 or 3 bedrooms) or something unique, you'll likely have to compete for it still in 2018.
Toronto has a real shortage of larger "family friendly" units, which means those looking to stay downtown and not escape to the boring suburbs, have less inventory to choose from to begin with. If you're someone who is thinking about moving up or downsizing you're likely to be met with some competition from other buyers.
On the flip side, this does create some opportunity for those who are willing to look past the bad on the "ugly duckling" units and see the potential of turning an outdated condo or beaten-up rental into an urban oasis personalized to your liking.
Obviously, it's impossible to predict the future entirely, but the 3 points above are solid advice given the long-term market trajectory for Toronto's condo market.
The most important thing for anyone thinking about buying in 2018 is to get your finances in order immediately and get your team of professionals organized to help you with your search. Your Real Estate Agent and Mortgage Broker are important people to help you navigate the realities of the shifting market and mortgage environment as we enter 2018.