Toronto has never been affordable, per se – at least not in the past few decades. But its backslide into eye-popping unaffordability is a relatively new development. As the CBC reported, Toronto has now outpaced once-intimidating juggernauts like New York and Los Angeles in terms of housing unaffordability. (As a slight note of consolation, at least you aren’t in Vancouver, which bests Toronto in that category).
Still, the show must go on. A whole new generation of coming-of-purchasing-age Torontonians are looking for ways to enter the market – as well they should. How do they do it then? How do they face one of North America’s most expensive real estate markets head-on, and bravely get the job done?
That’s what this article aims to address. Below, you’ll find a few strategies for saving on real estate, from what types of homes to consider, to finding an affordable real estate lawyer in Toronto for closing.
Consider Pre-Construction Condos
As real estate experts like GTA Homes note, pre-construction condos offer bang for your buck. Since you’re buying in the pre-construction phase, you access “first pricing,” often the lowest possible price. You also access “first appreciation,” as your investment starts appreciating the moment you buy it.
When buying a pre-construction condo, make sure you choose a reputable builder who has a track record of completing past construction projects on time.
Pre-constructions don’t work for everyone. If you need a place to live right now, they will probably not be your ideal choice. But if you are willing to part with your down payment now for a later move-in date, you can some of the best price per square footage this way.
Choose Your Window Wisely
As Refinery 21 points out, winter tends to be the slowest season for real estate in Canada. Therefore, many might assert, it’s also the best time to buy. In 2021, all bets are off (for the most part).
Rather than bank on buying in a particular “slow season,” keep your eyes glued to Toronto Real Estate trends. In particular, track the monthly and quarterly changes. (At the time of writing, the monthly change was down 3.6% overall, and one-bedrooms were down slightly from three months ago).
Choose a Virtual Real Estate Lawyer
There aren’t many opportunities to save during the homebuying process, but legal services are an exception. If you partner with a virtual real estate lawyer rather than a traditional brick-and-mortar firm, you can access lowest price guarantees and fixed-rate pricing.
Honestly, savings aside, virtual lawyers are still the way to go. They’re accessible, available round-the-clock and – in these remaining COVID times – a contactless option that provides you professional legal counsel without in-person meetings.
Borrow from Yourself
Lastly, let’s look at a sage piece of advice featured on Narcity: Borrow from your RRSP. Some homebuyers undoubtedly already know this, but it’s still not as common knowledge as it should be. If you are a first-time homebuyer, you can borrow money from your RRSP for a down payment (up to $35,000), which isn’t subject to income tax. You have to repay the loan in 15 years. For all the prospective buyers scrimping and saving, this can prove an elegant solution. Keep in mind that borrowing $35,000 from your RRSP now will reduce the amount of retirement savings accumulated later on.
Here’s hoping the real estate market cools in the near future. Until then, follow these simple strategies for saving on real estate.
You may be interested in reading, “What Is Driving Up Home Prices in Toronto in 2021?”