In this video, we’re going to be discussing the pros and cons of buying and renting in the Toronto housing market. We’ll be comparing the two different options, and providing tips on how to make money count when it comes to housing. The best mortgage brokers in Toronto return for another episode of Make Money Count. This week, they debated renting vs buying in this current market. With how much housing prices have recently declined and how much rental rates have risen, it is now cheaper in a lot of cases to buy a property and build equity rather than paying all-time high rent prices.
No matter the market, it is essential to examine these opportunities on a case by case basis, so listen to the episode to learn the math to help make the decision easier. The team looks at an example in downtown Toronto where the monthly rent of a one-bedroom condo is $3000 and the purchase price is listed at $489,000. After putting down a 5% down payment as a first time home buyer. A monthly mortgage payment of $2,756 on a 5-year fixed rate of 4.8%, $1,292 in annual property taxes. Monthly maintenance fees of $329, you arrive at a monthly average cost of $3,192 a month.
This is not much more than the $3,000 rent and you have the potential to build equity at the same time. Marcus and Justin also discuss the overreactions of the central banks. When it came to stimulating the economy during COVID and now overcorrecting it with rapid rate hikes. This is what has put real estate prices in a difficult position. They rose prices to unattainable levels and are now falling back to earth. This will have tough consequences for those who purchased at all time highs. Are now servicing the debt at unaffordable levels.
Only once inflation slows down will the central banks pause these rate hikes and then pivot in the other direction. Whether you’re new to the city or you’ve been here for years, this video is a must-watch! We’ll be discussing the latest trends in the Toronto housing market, and giving you advice on how to make the most of your investment. Make sure to watch to the end to find out which option is best for you!
