What to know about Buying Your First Condo
2020 has been a tough year for the Toronto condo market for a few reasons:
1. Crashing rental market due to COVID
2. New Airbnb regulations
3. An uptick of condo owners heading to the 905 for bigger homes and green spaces during a pandemic.
It follows, therefore, that it is a great time to be a condo buyer. For the first time in years, condo buyers in Toronto have the upper hand. Don’t squander it! We have no doubt that the condo market will come back in a few years. Immigration will again prop up the rental market and when we are all allowed to gather in large groups again, the downtown will draw more people than the suburbs will.
CMHC for Condos
Not only have the prices gone down (slightly) and the choices have gone up, but also, the Federal Government has further incentivized condo buying for first-time homeowners in Toronto. Do you remember when CMHC brought out its Shared Equity Mortgage Providers Fund last year? You don’t? That’s because the program really fell short in actually addressing the affordability issue in Toronto and therefore it was a wildly unpopular program. Basically, the government would loan first-time buyers 5% down payment in a shared equity style loan, provided the total purchase price did not exceed 4x the buyer’s annual income and provided that the buyers themselves also contributed 5% to the down payment. The program was capped at a total purchase price of $505,000 and there are very few properties in Toronto that sell for that price or less.
The program has just released changes that will actually help first time home buyers looking for a condo in Toronto. The maximum eligible purchase price has been raised to $722,000 and the debt ratio has gone up to 4.5x your annual income. (I won’t get too into the weeds about it because we are not mortgage brokers. If you have more questions, ask your mortgage broker for advice!)
This is all to say, if you’re looking for a one-bedroom condo in downtown Toronto and you have about $40,000 in the bank, this is your time to buy! The market and CMHC are both in your favour right now.
The Kim Kehoe Team