Earlier this summer, I came across a headline from The Huffington Post Canada about the housing market that left me shocked. “Toronto House Prices Are Rising by $550 a Day” it read. Even with the hot real estate market in Toronto, I found that hard to believe.
I clicked the article and read how in April, it was reported that single-detached home prices in Toronto were up 18.9 per cent compared to the same time last year. This worked out to $16,820 per month or about $550 per day. The writer then took that number and concluded that by 2026, the average single-detached home price would be $2.26 million dollars.
Not for a second did I believe this to be true. Nothing goes up in value forever.
The problem is, some people read the article and believed this will be the case in 2026. Of course, it wouldn’t be a stretch to imagine a potential homeowner reading the article and immediately purchasing a home because they believe they’ll be priced out of the market if they don’t. Others might see it as easy money. Based on the math, if you bought a home today, it would be worth an additional $200,000 in just a year.
I’m not suggesting these headlines are lies, but I do believe we need to consider where the information is coming from and how it’s presented to us. We shouldn’t take everything at face value, especially if it’s influencing us to make a major purchase.
Do Additional Research on Housing Market
When headlines like these pop up, it’s a smart idea to do additional research. I’m fairly positive a reputable realtor would never suggest that real estate is going up by $550 a day. Instead, they would be able to advise us on the current market conditions and how much homes are going for in our preferred neighbourhoods.
Instead of worrying about what someone says houses will be worth in the future, we should be more focused on what we can actually afford at the present time. Yes, we want our homes to appreciate, but that shouldn’t be the driving factor when deciding to buy. This is going to be our home; we should be looking at what’s the right fit for us now as opposed to what we could potentially sell it for in the future.
Besides considering its current – and future – price, there are many other things to keep in mind when buying a home. We need to factor in additional costs such as property taxes, maintenance and utilities. There’s also expenses not related to our homes that we shouldn’t forget about such as saving for retirement, taking vacations and the cost of raising children.
Related read: To buy or to rent? 10 things to consider
Is There a Vested Interest?
The media at its core is neutral and objective. They always strive to tell both sides of the story, but sometimes the information provided may benefit one group of individuals more than the other. They’re still trying to get a particular message across. Sometimes, stories that get picked up can show bias.
This really applies to any business as a whole that provides a product or service. For example, a real estate board or mortgage provider will be more inclined to say that real estate will only go up, while credit card providers will obviously say their product is better than the rest.
Do they have a vested interest? Some would say yes, but it’s always up to us to do our research, sort through all the information out there, compare and come to our own conclusions.
Always do your homework before heading out to open houses – compare the best mortgage rates today!