Living in the GTA means coming to terms with a real estate market that’s as wild as the Leviathan at Canada’s Wonderland.
During the COVID-19 pandemic, housing prices hit record-highs. But in the backhalf of 2023, real estate prices started declining while inventory began to surge.
The rental market has been equally dynamic, with the average monthly lease skyrocketing by double-digits year-over-year. But as many agents had noted, that kind of momentum was unsustainable. Thus we’re now seeing rental prices come down over the past six months.
However, if you’ve decided to make GTA your home, the question becomes whether to rent or to buy. So what should you consider when deciding between homeownership and the simplicities of tenancy?
Well, the biggest consideration is money.
“It really comes down to how much today’s interest rates affect you, and how much money you have saved up for a downpayment,” says Strata.ca realtor Osman Omaid.
In short, if you've got a piggy bank bursting with bills, the scales might tip towards the buy side. But if your downpayment screams pocket change, Omaid is waving the rental flag.
But he also points out that you must take the current market realities into consideration.
Even if you do have a decent downpayment, you’ll still want to think through your purchasing journey.
“With interest rates and inflation being what they are, the market trajectory is largely uncertain at this moment. This is why so many buyers are on the sidelines. If there's no pressing reason to buy right at this moment, then don’t force yourself just for the sake of it.”
But on the flipside, if you have a decent pre-approval and must move out, now is the time to find yourself some good value as prices trend downwards. You can then ride the appreciation wave upwards once the market picks up.
Although, you’ll need to be in it for the long-term gains.
“Most likely, appreciation won't go up in the coming months. But property values will rise in the general future,” Omaid explains.
And that’s another big consideration when it comes to choosing between buying or renting in the GTA — how long are you willing to stay in one place?
Only here for university or a temporary work opportunity? Renting is perfect. Jetting off to Europe next month so you can try your hand at being a pastry chef? No problem.
“Selling a property can take time and may not be as liquid as other investments — especially in today's climate where some properties are sitting for over 30 days on market” warns Strata agent Michael Fawcett.
“Purchasing a property also requires a big financial commitment, including closing costs, and ongoing mortgage payments. I always tell my clients to buy, only if you can afford to hold onto that home for a minimum of five years.”
And as another Strata realtor, Jenelle Tremblett, says, “Renting is better if you can’t commit. All you need to provide is two months’ notice to move out. You don't need to worry about selling or leasing the place while you’re gone.”
If planting roots in the GTA is your long-term plan, you’ll want to make sure choosing the right neighbourhood in which to settle.
“Sure you can buy in your less-than-ideal area and save $50,000. But do you actually want to live there day-to-day? So many people forget that you don't need to think like an investor would. You can focus on the walkability of a neighbourhood, or whether it offers good transit — whatever your criteria may be,” explains Tremblett.
But hey, for those not keen on property marriage but still want a slice of the real estate pie, Tremblett suggests REITs. It's like buying a share of that fancy condo, but without committing to it forever.
Speaking of commitment, all relationships require work. But some more than others. Renters can rejoice with zero worries about leaky faucets, crumbling walls or broken appliances.
“It's a dream for many people like myself. I do not want to be worried about maintenance issues or repairs. As a tenant, you always know what you're paying per month,” says Tremblett.
Homeowners, on the other hand, must buckle up for potential roof dramas, plumbing calamities, and other unexpected expenses.
Yet, sometimes carefree living can feel hollow. As Fawcett hints, “Renting may feel like tossing money into a pit, while homeowners build their equity with each mortgage payment.”