We receive a lot of e-mails on a fairly regular basis from readers asking whether they should be renting or buying a condo in Liberty Village. This a great question and there are a couple of important factors to consider. Let’s have a look at reasons why now may be a great time to make that Liberty Village condo purchase vs stay renting for the time being:
The Rent vs Buy Conundrum
Interest rates are still at a historical low and a first-time buyer could carry the mortgage for a $329,000 condo (a price-point that happens to be popular in Liberty Village) for $1,245 a month. (20% down, with a 3% interest rate mortgage amortized over 25 years).
Don’t get us wrong, we understand that a 20% downpayment amounts to no less than $65,800 and that can be extremely difficult to save. The downpayment, in many cases, is the deciding factor for a lot of renters. They simply do not have access to that amount of money. For the purpose of the blog entry, let’s assume you do and are still deciding which is right for you.
The rental market is currently RED HOT in Toronto. It isn’t unusual to hear about bidding wars for a rental unit. We are getting about 5 enquiries a day asking for help in locating a condo to rent in Liberty Village. We are helping a lot of those people find a great space but you absolutely must have your ducks in a row and be ready to pounce quickly once you find the right space. You will need to have a credit check, employment letter, references (preferably from a recent landlord) and a strong offer.
Given the pricing in Liberty Village for a rental, which is $1300 for a bachelor, $1500 for a 1-bedroom and $1950 for a 2-bed (these are all starting prices), you will also need cash.
Renting in Toronto is getting more and more expensive, and in many cases, it can be cheaper to own than to rent. Of course there are costs to consider other than your mortgage: in the above example, maintenance, taxes and utilities could add $600 to the monthly expenses for a total cost of $1,850 a month. Still, condo ownership means that a good chunk of your mortgage payment is building equity in your condo, so if you have a ready downpayment and are paying down your landlord’s mortgage, now just might be a good time to buy.
Liberty Village Has Experienced a Surge in Inventory
The Liberty Village real estate market is more balanced than it has been for a long time. The number of Buyers no longer outweighs the number of Sellers. There is greater inventory, meaning you have more to choose from in Liberty Village. Ther are a few reasons for this shift and one of them was a very deliberate move by our federal government. Tighter mortgage restrictions last summer made it slightly more difficult to qualify for that mortgage. That took some wind out of the sails and a few buyers out of the market place. Another reason for the increase in inventory is because some of Liberty Village’s newest condos are just about complete and ready for occupancy (65 East Liberty St and 5 Hanna Ave to name the newest). More inventory means more listings which means more negotiating leverage.
While Sellers still aren’t giving their properties away (we represent lots of them and are tough negotiators), the condo that used to sell in 5 days for above the asking price is now taking 30 days to sell and selling for a few thousand dollars under the asking price. This may be your time.
We hope this has answered some of your Rent vs Buy questions. We offer our readership some fantastic ways to stay up on the condo market in Liberty Village, whether you are looking to rent or buy. LibertyVillageToronto.com offers condo listings updated throughout the day.