With all the doom and gloom in the media today about the Toronto housing market, the question ‘to buy or not to buy a house’ seems to be on a lot of homebuyers’ minds.

The people I’ve talked to lately offer up 5 reasons NOT to buy right now:

1)    The Bubble: “I’m going to wait until the bubble bursts and buy something when prices are lower.”

• Looking back to Jan 2012, many economists predicted a real estate crash in 2012 with house prices falling up to 25%. That didn’t happen (TREB reports prices up 4.3% in 2012 even though fewer sales happened). Are you so sure the crash will happen in 2013? If you are, then I’d say wait it out.
• The reality is no one has a crystal ball and there are many creative ways to ‘interpret’ data – search the internet and you can find the entire spectrum of predictions on what will happen with the Toronto real estate market. You need to weigh the information against your own motivations for moving and just see if it makes sense.

2)    Municipal Land Transfer Tax (MLTT): “I’m going to wait until they scrap the Toronto Land Transfer Tax.”

• True, Mayor Rob Ford made scrapping the MLTT one of his key election promises back in 2010 – and in a Feb 10/2013 interview at Newstalk 1010 he said “I’m going to definitely try to get rid of 10% and bit-by-bit knock it off and try and give people some breathing room.” So you can go ahead and wait for that to happen, and wait, and wait… but note – there was no reduction in the approved 2013 City Budget.
• I know the last time I moved I wasn’t impressed with the Toronto LTT – but I love Toronto, there is no where else I’d rather be… but if that is not the case for you, another option is to look to Mississauga and beyond.

3)    Prices are too high: “Houses just aren’t worth what people are paying for them these days.”

• My grandparents bought their first home on Woodbine Ave, south of Queen St for $6000. They thought the prices were too high back then too, but they really wanted to own a home.
• Not everyone is driven to home ownership – but if you are, prices are what they are. And despite the Blips, Bubbles, and Softening over the decades – that home on Woodbine is worth a hell of a lot more than 6 grand now.
• Home affordability (compared to income) has certainly decreased and pressures will only make that worse over time (few new houses are able to be built in Toronto due to a lack of space and small condos are the new development norm – where will families live? Houses are an increasingly rare resource and therefore likely to increase in cost).

4)    I’m single now: “What if I meet someone and they live somewhere else, or they have kids, or, or, or…”

• I must admit, I’ve never heard this from a guy… But a lot of women I’ve talked to seem to mull this over when considering home ownership either for the first time or when starting over.
• Again, there is no crystal ball. You may meet someone next week, next year or never. I think you should always do what’s best for you based on what you know today. If things change – adapt. But some sound advice may be to choose a place that would have positive cash flow if you want to rent it out in the future – for what ever reason.

5)    I can’t afford it: “I really want to get on the property ladder but I just can’t afford it.”

• Everybody talks about the 3L’s – Location, Location, Location, but I think it should be the big F for FINANCES first and then location.
• The first step for anyone considering buying a home for the first time, or moving up should always be an honest review of his or her finances, and just because the bank is willing to give it to you $X, doesn’t mean you should borrow that much. Home ownership is not for everyone and unexpected costs will always pop up.

Are you unsure whether or not NOW is the right time for you?

If you are looking for some honest advice on whether or not to buy a home now, give me a call or send me an email by clicking here. We can chat about it over some coffee.

I’m in this business to help people and my number 1 rule is ‘treat people how I’d like to be treated’. I put people NOT commissions first, you’ll get my honest opinion. I promise.