As the real estate market in Ontario continues to see high prices, it no longer matters if you’re seeking a home in the city or a rural area, you’re likely going to pay more. For current property owners whose equity on their home has increased or investors with the know-how to turn properties, the idea of buying or selling might be an alluring thought. First-time home buyers, on the other hand, can be intimidated by prices, choosing to wait for things to “settle down” first.
“If you’re a prospective first-time homebuyer, don’t wait to enter the market until listing prices decrease. If you don’t want further inflation to prevent you from finding a home, you need to start now,” says, Jason O’Keefe, CEO of Real Home Experts based in Kitchener. “There are ways that your first home purchase can work out.”
Consider buying outside the region or even out of province
As remote or hybrid work becomes the new norm, more people are choosing to move out of the more expensive areas where the ratio of square feet to purchase price is more reasonable. “In December 2021, the average price of a detached home in Kitchener-Waterloo surpassed $1 Million,” according to the KWAR, says O’Keefe, “if you’re somebody looking to buy their first home, that number is going to make you faint and there’s a high chance you’re not going to be approved for a mortgage of that amount let alone find a down payment.”
Buy something smaller and use that equity to purchase the house you want
For many families or single buyers, a detached home might not be within their budget. Starting out with something smaller, such as a condominium, might be a more reasonable choice. “Once you own your first home, whether it’s 10 floors up or a home with a basement, you’re going to have an easier time getting an approval on another property,” says O’Keefe, “If you buy something small first, rent it out and use that income to use as equity and as a down payment on a home you want to live in, you’re still going to be able to get the benefits of a first time home buyer, such as tax rebates because you didn’t reside in your first property.”
There isn’t one sure way to buy your first home
There are other creative ways that prospective homebuyers can become owners without struggling to do it alone. “Buying a property as co-owners with friends, for example, to build up equity and share the financial expectations is a great option right now,” says O’Keefe, “And, the number of young and even a bit older adults borrowing money from mom and dad has also increased. There isn’t only one way to buy a house. Speaking with a dedicated real estate agent can give you an idea about your best way to get into your first home.”
Ready to get started? Contact Real Home Experts today online.