Lifestyle in the City or Affordability in the Suburbs

December 9, 2014 | Posted by: Mike Garganis

It's been a few months since I've been in touch.  On a personal level, I moved to a new quiet town with a huge lot, and got great bang for my buck.

Perfect time to discuss affordability versus lifestyle.  For the most part, I work from home but it doesn't mean I don't want quick access to highways or stores.  Personally, I prefer a quiet younger neighborhood where my family can grow, my kids can go outside and play and I can enjoy the backyard without a lot of traffic or nightlife noise.  
Home sales are showing no signs of slowing down, interest rates are still low and house prices are soaring......sounds like a broken record.
For most, salaries aren't rising as fast as the average home is increasing.  What options are there?

The Bank of Canada recently released a statement that home prices 'MAY BE' 10% - 30% overvalued.  That is a scary thought, but that is more of an estimate based on the debt load we as Canadians are taking on.

As a mortgage broker, I'm also an investor, and for me Real Estate is the best asset.  Vancouver and Toronto lead the way for home prices, but when you buy a house in the GTA, you are paying double the land transfer tax.  You are also paying for location more than anything.  

Where is the balance between high house prices and what your income is?  I believe the answer is sitting outside the GTA.  I'm not saying pick up and move, but if you are struggling to get the numbers to work, it doesn't hurt to look at new options.

For example, a detach home in Stouffville is currently going for $550,000 while something similar in the GTA is going for $870,000.  That's a $320,000 difference which equals about $1,300 a month in monthly mortgage.  That's pretty significant.  

There are other factors to take into consideration....commuting costs and travel time to work, property taxes, amenities (grocery stores, etc).

Bottom line, this is a big that takes proper planning.  You don't want to pick up and move every time because that costs a lot of money and is a big headache.

Sit down with the right people and get the numbers that make sense for you.


Mike Garganis

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