The Covid-19 pandemic has changed our lives in almost every way. Certain aspects like family and home-based pursuits have been strengthened, while external activities like education, recreation and entertainment have been challenged.
Covid-19 has had an absolute impact on the economy with many businesses closing, negatively impacting employment opportunities.
Interest rates are at historical lows and if you have been saving to purchase your first home you may be well positioned; but that may not be the case in all areas. If you are still looking to live the urban lifestyle, there has been downward pressure on condominium prices as vacancy rates creep higher creating expanding inventories. The suburbs are a different story, particularly in the Regional Municipality of Durham. Those starting families and needing more space have been leaving Toronto’s core and looking to the 905 region for access to modern infrastructure and recreation facilities. Many established families in the 905 have decided to weather the pandemic and stay in their current homes. This move has limited supply, while demand has crept up. This trend may be partially attributed to the pandemic and the need for yard spaces that condominiums just cannot offer.
In the Durham Region the average home price was up almost 20% year over year with the City of Oshawa seeing gains of over 22.5%. Established homeowners in Toronto have seen enormous increases in equity since 2009 making the move outside the city financially advantageous. This reality has created cash rich competition for first-time buyers.
Many younger real estate buyers that purchased a condo as an investment years ago are now stuck with the prospect of dwindling equity and increasing maintenance fees limiting their ability to save a down payment for a larger home outside the city. Furthermore, younger wage earners tend to work in less established positions that have been hit harder with pandemic layoffs and downsizing.
For those fortunate enough to have the money to purchase, short supply has seen the return of bidding wars for attractive properties. There is a good option for millennials, the fixer upper. The 905 presents many opportunities to purchase an older home (25-40 years old) that may be in original condition. Those willing can avoid the bidding wars and seek older homes saving thousands of dollars. One clear advantage of this strategy is having less money tied up in a home purchase freeing funds to update a home with the latest amenities suited to the buyer’s taste.