Toronto’s housing market: Part 1
September 5, 2014
There have been two particularly interesting articles published recently about how people are coping with Toronto real estate prices – one is an article in Toronto Life about a family who lives in a 700 foot condo and the other was in the Globe and Mail, headlined ‘The Million Dollar Dream’.
According to the Toronto Real Estate Board, the average price for a detached home in June 2014 was over $920,000. The average price for a semi-detached home was over $670,000.
These prices raise two questions – there are enough people able to finance homes at that price, so how are they doing that? The second is – what do you do when you want to raise a family in the city but aren’t able to afford a home?
Looking at the number as a whole can be overwhelming (especially when it’s so close to $1 million), so let’s break it down:
Take a $750,000 home with a 5% deposit. With a mortgage of $712,500, your monthly payments will run you about $3700. For a couple who both earn $100,000, that’s affordable, even when you consider insurance (because the down payment is less than 20%), property taxes and utilities.
You might argue that it makes sense to rent at those prices, but take a look at what three bedroom homes are renting for in prime neighbourhoods and it’s comparable.
Click here for the article from the Globe