Strategies for Affording Your First Property
First time homebuyers in Ontario may feel overwhelmed by the high prices and high interest rates in the real estate market. But, you can find an affordable home with compromise, planning, and expert advice from your broker. That will fit your life.
Challenges Faced by First-Time Buyers in Ontario
The Ontario real estate market has traditionally been very competitive. Demand is strong in many areas, especially in urban centres like Toronto and Ottawa. This is due to many factors, including an increasing population and a shortage of housing supply. As a first-time buyer, this means you are entering a market with bidding wars. Properties often sell for more than their asking price. First-time homebuyers face many challenges. Some are specific to Ontario’s real estate market.
Finding Solutions to Rising Home Prices
Home prices in the province have skyrocketed in recent years due to a combination of high demand and limited housing supply.
Down Payment Hurdle
First-time buyers must save at least 5 percent on any home under $500,000. They must save 10 percent on every dollar of a home’s price from $500,000 to $1 million. And, they must save 20 percent on every dollar above $1 million.
Mortgage Qualification
Canada’s new mortgage rules have made it harder for first-time homebuyers to qualify. Stress tests are for making sure buyers can afford their mortgage if rates go up. They can greatly impact how much you can borrow.
What to Expect in a Bidding War
In some parts of Ontario, the high demand for housing leads to bidding wars. In them, multiple buyers compete for the same property. They often push the sale price above the asking price.
Finding Your Perfect Location
In a province as varied as Ontario, it can be difficult to pick the right location. Urban areas offer easy access to work, school, and amenities, but come with a hefty price tag. On the flip side, rural or suburban areas offer more affordable options, but come with longer commutes and limited access to services.
