For prospective first-time buyers, entering Canada’s housing market isn’t cheap — especially in urban centres like Vancouver and Toronto. Detached homes in those cities typically cost owners at least $5,000 in mortgage payments each month. In May, the average sale price of resale detached home in Toronto was $1.15 million — an increase of 18.2 per cent from May 2014.
And today’s record-low mortgage rates, while aiding in first-time home buyer affordability, aren’t much of a help for those looking to upsize – move-up buyers can expect to pay a difference of $3,000 in mortgage payments between condo and house ownership.
It’s no wonder that 83 per cent of respondents feel it’s less affordable to buy a home today compared to past generations, according to RateSupermarket.ca’s Not Your Mother’s Mortgage poll.
In Search of Bigger Pastures
So what do you do when you find yourself priced out of your dream home? For some, moving away is the solution. According to a recent RSM social poll, 37 per cent of respondents stated they would move to a new region if it meant affording a bigger home.
For Lyndsey McNally and her husband, that meant moving to Ajax. The couple bought a three-bedroom detached home in 2008. “There were two major deciding factors — space and cost. We knew that we wanted to live in a detached home with outdoor space, but that was out of our price range in Toronto,” McNally, 31, says.
Seven years later, the benefits of their decision are aplenty.
“The lower cost of our home has allowed us to focus on paying our mortgage down faster,” McNally says. “Ajax has a much smaller population than Toronto so we have found that there is less congestion on the roads when we are travelling locally.” Access to nearby schools and community programs are also perks.
The Travel Time Trade Off
But the move hasn’t been without drawbacks. McNally says that adjusting to a new town was initially challenging, and maintaining the same social life as they enjoyed in Toronto has been difficult for the couple. And then there’s commute – McNally works in Etobicoke.
“I commute about an hour each way from work. Traffic can be hard to predict and so I have to leave very early in the morning to be at work on time,” she explains. “While I did commute living in Toronto, I did it on the TTC which was much more predictable.”
The Benefits of the ‘Burbs
When the couple purchased their home in Ajax, similar homes in Toronto were selling for close to $300,000 more than what they paid. Their monthly cash flow isn’t all that different now, McNally says, but they’ll own their home much faster. “We have a good lifestyle in Ajax, and we love having lots of outdoor space at home. We also feel more financially secure than we did when we were paying our landlord’s mortgage in the city.”
For Torontonians (and other city dwellers) considering moving beyond the city limits in order to buy their first property, McNally has the following advice:
“A decision to buy in the suburbs is no different than a decision to buy property in the city. Purchasing a home is a decision big commitment that shouldn’t be taken lightly. Be sure to consider all the costs and changes in your lifestyle.”