GTA Market Trends, Affordability in Sept 2024 & Homebuyer Decisions: New Construction vs. Resale

[INTRODUCTION]

Neil:

"Hey everyone, welcome back to another episode of Getting Your Sht Together*. I’m Neil, and with me, as always, is Jerome."

Jerome:

"Hey, everyone! Glad to be here. Today, we’re diving into some interesting numbers from the Toronto Regional Real Estate Board."

Neil:

"Yeah, we’re going to break down the market stats for the month of August 2024 and also the affordability metrics. We’ll take a look at the big picture—how the market’s been over the last five years especially for the month of August —and then zoom in on what’s been happening in the last few months, i.e. since May 2024."

[GTA Overall Market Overview]

Neil:

"So let’s start with the overall view of the GTA. We’re seeing sales activity at multi-year lows. Jerome, do you want to talk a bit about how that’s playing out?"

Jerome:

"Sure thing. It’s pretty clear that prices are generally lower than last year across most regions—though there’s one exception we’ll get into in a bit. But what really stands out is that the number of listings is higher compared to the level of sales, which is putting us in a buyer’s market in most areas."

Neil:

"Exactly. And on top of that, properties are taking longer to sell—about one to two weeks longer than what we’ve seen in previous years. So, if you’re selling, you’ve got to be a bit more patient right now. And the sellers have to price it perfectly to get some attraction. I have seen a number of listings come on the market and sit for weeks before being taken off entirely."

[REGIONAL BREAKDOWN]

Neil:

"Alright, now let’s get into the regions, starting with the City of Toronto. What’s going on there, Jerome?"

Jerome:

"Toronto is a bit of a mixed bag. While overall the market looks similar to the rest of the GTA, there’s one key difference: if you look at the median prices, they’re actually still higher than last year in Toronto. And in certain neighborhoods—places like Bayview, Casa Loma, and the Beaches—prices have increased in certain property segments."

Neil:

"Right. But even with those price increases, homes are taking longer to sell—almost three weeks longer in some cases. And, just like the rest of the GTA, Toronto is clearly in a buyer’s market."

Jerome:

"Moving on to Peel Region, it’s a similar story. Prices are below last year’s levels, and homes are taking about two weeks longer to sell. Buyers are definitely in the driver’s seat here. Only the condo segment in Brampton witnessed price increase since July"

Neil:

"Yeah, and York Region follows the same trend. Sales are down, and while prices are lower than last year, they’re still higher compared to previous years. But, with every month since May 2024 seeing a drop in sales activity, we’re right on the edge of a buyer’s market."

Jerome:

"And let’s not forget the months of inventory in York, which have shot up. Properties are taking about a week to 10 days longer to sell."

Neil:

"Now, let’s talk about the east end—Durham Region. Jerome, this is where things get a little different, right?"

Jerome:

"Yeah, Durham is interesting. While sales are down and prices are lower than in 2021 and 2022, the months of inventory aren’t as high as other regions, which means it’s more of a balanced market."

Neil:

"Agreed. But it’s still taking longer to sell—about two weeks more than usual. So even though it’s more balanced, buyers still have a bit more control here."

Jerome:

"And last but not least, the west end—Halton Region. Here, sales are just slightly lower compared to August 2022 and 2023, but median prices are still higher than they were in 2021 and 2022. Do note that prices increased have been witnessed since July in Burlington, Halton Hills and Milton in both Single Family Detached and Attached home segments. Are things about to change here?"

Neil:

"I guess it’s too early to tell, as homes are taking about two weeks longer to sell and longer than it took to sell in July. Still, with enough sales happening, Halton remains a balanced market for now."

[AFFORDABILITY METRICS]

Jerome:

"Alright, Neil, let’s move into affordability. There’s some good news for buyers here, right?"

Neil:

"Absolutely. If someone can manage a 20% downpayment, they can buy an average condo in any GTA region with less than $100,000 in household income. If you’re going with the minimum 5% downpayment, though, that income requirement jumps to about $125,000."

Jerome:

"And for detached or single-family homes, affordability has improved, too. With a 20% downpayment, you need less than $200,000 in household income. But it’s tough to buy a detached home with less than 20% down, except maybe in Durham (think Oshawa) and York (i.e. the northern parts)."

Neil:

"And the trend over the past six months has been of increasing affordability. In fact, affordability has gone up in 72% of the 268 location and property type combinations we track with the Toronto Regional Real Estate Board. But there are a few exceptions. The Townhouse segment in the City of Toronto witnessed a slight decrease in affordability. And so did the Single Family Home segments in Halton (especially given the price increase recently witnessed in Burlington)"

Jerome:

"That’s right. And the biggest improvement in affordability? It’s for semi-detached or single-family attached homes."

[CLOSING REMARKS]

Neil:

"So, to wrap things up, the market is still a quite slow with lower sales and longer selling times. But there’s good news on the affordability front given the recent prices drops and interest rate cuts."

Jerome:

"Yep. Buyers definitely have more control right now. While things are looking up in terms of affordability, now is not the time to let your guard down if looking to buy. If you're ready, the right moment to act could be just around the corner. To assess your readiness, I’d highly recommend checking out episode #5, where we dive into our detailed readiness checklist. "

Neil:

"If you want more details or a deeper dive into the stats and affordability metrics we’ve discussed, the full report is available on my website. Checking out using the link in the episode description."

Jerome:

"And as always, if you’ve got any questions or want personalized advice, feel free to reach out to us. We’re happy to help."**Neil Joseph**: *"Welcome back to 'Getting Your Sh*t Together,' where we break down everything you need to know about buying a home without all the boring bits. I’m Neil Joseph, and with me, as always, is Jerome Christensen. Today, we’re diving into a big debate: New construction versus resale properties—what’s the better choice?"*

**Jerome Christensen**: *"Hey Neil! Yeah, this is one of those questions that always gets people excited. And why wouldn’t it? Choosing a home, whether it’s brand new or a charming resale, is a huge decision. And let’s be real—it’s way more exciting than talking about interest rates, right?"*

**Neil Joseph**: *"Exactly. No one wants to hear us drone on about rates—what they care about is finding that perfect place that feels like home. But hey, we’re mortgage brokers, so while we’re here to talk about the fun stuff, we’ll sneak in a little practical advice too. Let’s get into the pros and cons of each option."*

**Jerome Christensen**: *"Alright, let’s start with new construction homes. The big advantage here? It’s brand new! No one’s lived in it before, everything is shiny, and you get to be the first to experience that 'new home smell'—you know, like that new car smell but for your house!"*

**Neil Joseph**: *"Yeah, nothing like stepping into a brand-new house, fresh paint, untouched floors… plus, the big bonus with new construction is customization. You get to pick your finishes, your flooring, your kitchen counters—basically, you get to make it *your* home from the ground up."*

**Jerome Christensen**: *"Totally! And don’t forget about energy efficiency. New homes are built with the latest tech, so they tend to be more energy-efficient. Your heating and cooling bills will thank you later. Plus, you often get a warranty, so if something breaks in the first few years, you’re usually covered."*

**Neil Joseph**: *"That’s a huge perk! And there’s something new we should mention for first-time homebuyers: the recent policy changes that allow you to qualify for a new build purchase using a 30-year amortization, even if you have less than a 20% down payment."*

**Jerome Christensen**: *"Exactly, and that’s a game changer for a lot of first-time buyers. Usually, with less than 20% down, you’d be stuck with a 25-year amortization. But with new builds, you can stretch it to 30 years. That means lower monthly payments, which can really help people afford more home than they might have been able to otherwise."*

**Neil Joseph**: *"It gives buyers a little breathing room, especially when everything else seems to be getting more expensive. It’s one more reason why new construction can be appealing to first-time buyers who are trying to keep their payments manageable."*

**Jerome Christensen**: *"Definitely. But, of course, like with anything, there are trade-offs. A longer amortization means you’ll be paying more interest over the life of the mortgage, so that’s something to keep in mind. But for some people, getting into a home sooner with more affordable payments is worth that extra cost in the long run."*

**Neil Joseph**: *"It’s all about balancing your short-term needs with your long-term financial goals. And hey, when you're buying a new build, those extra savings on monthly payments can give you a little room to breathe as you settle into homeownership."*

**Jerome Christensen**: *"Right. But as always, it's important to weigh the pros and cons. New builds give you flexibility with the amortization, but resale homes come with their own perks."*

**Neil Joseph**: *"Okay, so that’s new construction. Now, let’s talk about resale properties—homes that have a bit of history. What do you love about resales, Jerome?"*

**Jerome Christensen**: *"Resale homes have character. They’ve been lived in, loved, and they come with quirks you just can’t get in a brand-new house. Mature neighborhoods, big trees, established communities—that’s something a new development can’t always offer right away."*

**Neil Joseph**: *"Totally. And the thing about resales is what you see is what you get. There’s no waiting around, no construction delays, and you can usually move in a lot faster than with a new build."*

**Jerome Christensen**: *"Yeah, and a lot of the time, resale homes come with extras—like fully landscaped yards, finished basements, or even upgrades that the previous owners added over time. You might score a home with a great deck or a killer kitchen reno without having to do the work yourself."*

**Neil Joseph**: *"That’s a great point. Plus, with a resale, you get a better feel for the neighborhood. You know what’s around you, how quiet (or noisy) it is, and there are usually schools, shops, and parks nearby. It’s an established area, so you won’t be wondering what that empty lot next door is going to turn into."*

**Jerome Christensen**: *"But, of course, there are some downsides too. With resale homes, you’re likely dealing with older systems—plumbing, electrical, the roof—these could be nearing the end of their lifespan. So, while you might love that vintage charm, you could be facing some repairs sooner than you’d like."*

**Neil Joseph**: *"Exactly. And that can add up. Home inspections are key when buying resale—you want to make sure you know what you're getting into. And let’s not forget, older homes might not have all the modern conveniences of new builds. Think smaller closets, fewer bathrooms, or just outdated layouts that aren’t as open."*

**Jerome Christensen**: *"Yup. Resale homes can also have higher maintenance costs over time. And unlike new builds, there’s no warranty—so when something breaks, it’s all on you."*

**Neil Joseph**: *"So, new construction or resale? Both have their perks, and both have their challenges. But honestly, it all comes down to what suits your lifestyle. Do you want a fresh, customizable home with the latest tech? Or do you love the charm and history of a well-loved home in a mature neighborhood?"*

**Jerome Christensen**: *"Exactly. And no matter which one you choose, the most important thing is finding a home that fits your needs—and that’s what makes the home-buying journey so exciting. We’re here to make sure the mortgage process doesn’t get in the way of that excitement."*

**Neil Joseph**: *"That’s the key. Let’s keep the fun in house hunting and leave the mortgage worries to us. If you’re stuck deciding between new construction and resale, just remember: there’s no wrong answer, only what’s right for you."*

**Jerome Christensen**: *"Thanks for joining us today on 'Getting Your Sh*t Together.' Whether you’re dreaming of shiny new countertops or a cozy, established community, we hope this helped you weigh your options. And as always, if you’ve got questions, Neil and I are here to help."*

**Neil Joseph**: *"And hey, until next time, take care, and happy house hunting!"*