Anyone who doubts the value of real estate as an investment might want to consider the disparity between the average price of a home today and the cost in 2014.
The price difference is almost 60%: an excellent result for homeowners and investors alike.
It’s tough to hear for those who are seeking to enter the market or upgrade, of course.
Data released by the Canadian Real Estate Association (CREA) says price averages stood at $398,119 in January 2014.
Throw forward 10 years, and you must pay an average of $698,520 for a home.
The combination of higher mortgage costs and a shortage of available housing is driving the price of Canadian homes currently.
As an experienced real estate agency in your area, our agents recognise the difficulty of affordability.
Mortgage rates currently hover between 4.8% and 5.2% for a five-year fixed-rate deal, depending on the flexibility of the deal you’re seeking.
The ratehub.ca mortgage calculator finds repayments for an average-priced home now stand at around $3,900 a month.
A recent study by ratehub identified the most affordable and expensive places to live in Canada. The cheapest was Halifax, the only market where prices have dipped recently.
Toronto keeps the crown of the most expensive. You’ll need more than $1.11 million to afford a home in Toronto, according to ratehub. Buyers would need an annual income of $217,000 to afford a mortgage of that size.
These tips may help you achieve financial discipline when saving to buy a home.
Create a budget
Track your income and expenses, and identify areas where you can cut back or eliminate unnecessary spending.
Set a goal
Specific, achievable savings targets will help you achieve your goals. Set small milestones to make the process manageable and motivating.
Automate savings
Automatic transfers to a savings account will ensure a portion of your income goes directly towards your savings goals without you having to think about it.
Reduce debt
Use any spare cash to reduce high-interest debt from credit cards or personal loans. This will improve your credit score.
Boost income
Can you take on extra work or a part-time job to boost your income in the short term?
Government assistance
If you’re a first-home buyer, explore government programs designed to encourage your participation in the real estate market. These can save you thousands of dollars.