Is It Better To Buy New Construction Or Existing Home in Toronto?
If you’re in the home buying market in Toronto, chances are pretty good you’re feeling a little overwhelmed with the decision as to whether you should buy new construction or an existing home. There’s quite a bit to think about, considering location, your budget, property taxes, trends in the market, and more. We all need a place to live, but we also want to know we’re making a good investment, both for our present situation and our future.
Should you build or buy? This article explores the pros and cons for each.
Reasons to Buy a House in Toronto Instead of Building One
First, let’s consider the obvious: It’s really convenient to buy an existing home instead of building one.
If you see a home you like, you can make an offer and often move in within a few months, giving you just enough time to have a killer yard sale and pack up the rest of your belongings.
It’s also likely it could be cheaper – at least right now. There’s a chance your house won’t appreciate in value the way a newer construction might, but you may find a house in your budget that’s a bit larger or on a bigger lot than any new construction in the city.
A lot of new builds in the city are condos. If you’re looking for a more family-friendly, detached home, a newly constructed house might be difficult to come by without moving pretty far from the core.
While the GTA is peppered with semi-detached townhomes and condominium-style buildings, let’s face it – we’re just running out of land. So if a yard with a deck and a place to throw a ball around with the kids is important to you, you’re probably going to want to consider existing homes.
Reasons to Build a House in Toronto Instead of Buying One
On the other hand, building a brand spanking new house in Toronto does sound pretty fun! And it can be!
Some of the best things about building a home are:
- You get to make it your own. You’ll choose almost every detail, from the bathroom tile to the light fixtures to the height of the baseboards and everything in between. If you enjoy home design, this process can be especially fun.
- New home builds have plenty of modern amenities, like the fanciest appliances, new technology like smart devices and outlets, high-efficiency heating and cooling systems, and luxurious bathrooms.
- New homes are move-in ready. You don’t need to worry about replacing the carpet or painting over the previous owners’ mustard yellow bedroom walls. You’ll just turn the key and unpack your boxes.
- New builds often come with a warranty for as much as a year on construction defects and might also cover appliances.
- Everything is brand new. It’s unlikely you’ll need to spend money on things like appliances, carpeting, paint, or a new furnace for years – maybe even decades.
However, there are some downsides to both buying and building in Toronto too.
Just when you think you’ve decided exactly what you want to do, life can throw you a curveball. Better to emotionally prepare for the journey before you begin. Here’s what might go wrong.
What Happens When I Buy an Existing Home in Toronto
Home buying in Toronto in a post-COVID market can be a little more like a battlefield than you might imagine.
In an article posted in April, 2021, TRNTO.com says this about the current market:
“The Toronto Regional Real Estate Board (TRREB) said in a recent report that the average home price in Toronto has jumped 21.6 per cent to $1,097,565 from $902,787 last year. Sales have also gone up 97 per cent from last year in March to a record 15,652 from 7,945.”
Why is the price jumping? Supply and demand.
Supply and demand crises inevitably lead to the dreaded realtor tactic of forced bidding wars.
A bidding war happens when there are so few houses and so many buyers, many of them are willing to pay above the asking price. Sometimes, they’re willing to pay well above – hundreds of thousands of dollars above – in order to secure the house.
With so many people bidding on houses, you have to toss your absolute best offer into the hat.
“Buyers are sometimes bidding on multiple properties over the course of a weekend,” says Daphne De Groot, Justo’s own CEO and Co-Founder. “It’s stressful and heartbreaking to lose out on homes time and time again. But in this market, being aggressive is necessary. When 15 other people are bidding on the same home as you, you don’t have any other choice.”
Other downsides of purchasing existing builds:
- There could be structural issues you or your home inspector don’t see
- There is likely no warranty
- You don’t have much legal recourse after you’ve signed on the dotted line
- The process can be time-consuming as you have to go to a lot of showings and open houses.
- You’ll likely need renovations, even if they’re minor.
What Happens When I Buy a Newly Constructed Home in Toronto
Building from scratch might sound dreamy, but it has its own set of stressors to consider before you jump in with both feet.
- First, remember the sticker price on a new home says, “FROM” before it lists the price. That’s the cost of the most basic model with the most basic appliances and finishes they offer, and likely includes no landscaping.
They’ll show you all the upgrades. If you don’t want the sticker price to go up up up, try not to fall in love with the herringbone hardwood flooring or the luxury walk-in double shower.
- Building takes a lot of time. It can take months or even over a year from the time you secure your property to the day you move in.
- Backorders and other issues can arise. When you get that call that your cabinets are in but your countertop won’t arrive for another 13 weeks, you might start to sweat. Do you choose a new one? Wait it out? What if the new one gets backordered too?
- The stress is real. What seems like a million decisions can take its toll on you and your family. So prepare emotionally for the troubles that may come.
Whatever you decide to do, Justo is here for you! Contact our office and start searching for your dream home today! While deciding what home to buy or build may be stressful, choosing a realtor shouldn’t have to be! At Justo, we committed to providing you with fair and superior service with customer satisfaction at the heart of everything we do.