There’s so much happening in this market that we can sometimes lose track of the central purpose of real estate, which is, fundamentally, people need somewhere to live. Prices are down, and listings are up, but there are so many buyers. If you are one of the lucky buyers who can take advantage of falling prices and the plethora of listings, congratulations. Given the current market conditions, should you prioritize location or space?
Many first-time homebuyers want to buy their forever home as their first home. They want space for their family to grow into. They want to buy more space than they need. They often buy this space at the expense of the location. However, most people sell their first home within ten years of that purchase, no matter the size of the home. Therefore, you should always prioritize location over space.
It used to be true that very few locations in Toronto were “bad” from an investment perspective. However, if you want insurance against a further price decline, you should prioritize location over space. Buying a smaller house in a good location versus a large house in an undesirable location is a better investment. It will ensure that if and when there is another market downturn, your house will lose value slower than other properties. And, if you do need to sell during a downturn, your home is more likely to sell while others sit on the market.
What makes a “good” location in Toronto? A quiet, residential street in a good school district close to the subway. Bonus points if it is walkable to a main stretch of businesses and restaurants. You will pay more for less space, but your purchase will be more recession-proof than a larger house on a busy road or in a bad school catchment.
This is a great time to buy in Toronto because prices are down. Interest rates are high, but if you have cash and if you can keep your monthly payments within your spending, then this is your time.
