I am often being asked is it a good time to upgrade to a bigger house? After the CoronaVirus Pandemic started, we saw a lot of turmoil in the market, so why would someone want to upsize? The answer is interesting to know, because it’s not a bad idea at all. Many may debate doing anything at all, but wait till you read through the whole article.
In order to know moving to a bigger and potentially more expensive house is a right thing to do, we need to look at it from 4 different angles. After reviewing all the angles of an upsizing house, you’d be able to decide for yourself about buying a bigger house.
Step 1 . Do you need to Buy a bigger house?
Regardless of the market conditions, if you are an expanding family, you might want to upsize and purchase a bigger home. Other than that, “depending” on your local real estate market, it might be a good idea to upsize now as well. To get more insight about that read Step 2 in this article.
By looking at Toronto’s real estate market, you’ll notice that the small homes have been on the rise, while the market in the bigger homes got hit by the demand. That being said, the families who need to move, whether upsizing or downsizing, they still make the move. So it’s better to put your family’s needs first. Are you a growing family, or expecting new kids?
Or maybe you are adapting to working from home more often, and you need your own private space and office at home! As a Toronto Realtor who works both from the office and home I can tell you that working from home for a few hours in a day in your Condo’s Den is totally different than working from home full-time in your separate office. Working full-time from home, often requires a proper office set up, probably a separate room. If you have kids you don’t want to be interfered with while you’re in a ZOOM meeting with your boss, or a client!
Step 2. Is it a good idea to buy a bigger house in the current market?
The short answer is it can be a good idea but it “depends” on your local market! You might ask how? The answer to that is pay attention to how the real estate market moves during the COVID-19 pandemic.
As a Toronto Realtor and real estate investor, I’ve been analyzing the Toronto real estate market frequently. By looking at Toronto’s the real estate market in the beginning of May 2020 , you’ll notice that small homes are on the rise despite the fact that the number of sales were 67% down YoY! Average price of a home in Toronto is the same as it was a year ago, meaning that some properties went down in value, some went up and compensated the gap. So what were the properties that went down in value? Right, larger homes! And what were the properties that increased in value compared to the same time last year? Townhomes and Semi-Detached homes.
That tells you a better story of what’s the market trend right now. Smaller homes prices got higher, and larger homes prices went down ( Detached homes were down 3.5% YoY).
If you see the correlation here, you might conclude that in some Toronto neighbourhood it might make sense to sell your small townhouse and buy a bigger house and upsize to a larger home such as a detached. Because the price gap between a townhouse and a detached home got smaller. Again it depends on your own local market, in some neighbourhoods in Toronto the gap might be bigger or smaller. Thus it’s better to keep an eye on the market, both on the market that you’re living in and the market that you plan to move to.
Step 3. Where to upsize a house? Where to buy a bigger house?
The CoronaVirus pandemic changed the way that we were living, and working, and enjoying life. Nobody still knows when life will get back to normal. At this time that I’m writing this article from my home office, the news is that the Golf Courses, Tennis Courts, Ravines and some other outdoor activities will be open, but with all the physical distancing precautions.
Still there is no news about when they’ll open up the venues, sport centres, gyms, restaurants and other social gathering places. Offices are some started working with 50% capacity and asked their employees to come from home if they can, or come to the office every other day and such.
That being said, since the lifestyle is changing now, the condo living in Downtown Toronto and proximity to all the nightlife and restaurants and all the entertainment might not be an advantage in the next few months or a year or two. So some neighbourhoods might not be in a huge favour at the moment.
Thus when choosing the neighbourhood to buy a more expensive house or buy a bigger home, you need to have an eye on the current trends. You need to ask your real estate agent where people started to move to? What are gonna be the next up and coming neighbourhoods? Check your local trends to find out the pockets or potential suburbs that are being more trendy and you still have time to get into them. If you are in GTA and don;t have a real estate agent, you can talk to a qualified Toronto Realtor here.
Read More : Best Strategies for Move-up Buyers in Toronto
Step 4. What are the costs associated with buying a bigger house?
Buying a more expensive house brings more space and more joy to your family, but it has it’s costs too. First of all, upsizing to a bigger house always doesn’t mean being more expensive. As I explained in Step 3, you might sell your townhouse in Toronto and buy a Detached house in Aurora, which you might even buy the detached home there cheaper than your Toronto townhouse. So depending on where you move to, please consider the changes in the below costs:
1. Property Taxes
Often smaller suburbs might have slightly higher property taxes than a home in a place like central Toronto. Why? Because less residents ( houses ) pay for the municipal services and budgeting! Usually the difference is not huge, especially nowadays that an average home price in the Greater Toronto Area is around $821,000.
2. Utility Bills
Upsizing to a bigger house means getting bigger utility bills. From personal experience I can tell you that after moving to a house from a condo which you barely paid $60 for a hydro bill, when you face $300 utility bills, it’s a bit shocking at the beginning, but that’s what it is. You need to plan for that couple hundred dollars in extra utilities difference in your budgeting. Or find ways to save energy by insulating your home properly, etc.
3. Up keeping costs and maintaining the house
When buying a bigger house, there are things that you have to do to upkeep the house. For example, your roof, asphalt shingles, usually last 15 years on average, so if they’ve been done 10 years ago, you should think and budget for it 5 years down the road. Furnace systems usually go up to 20-25 years, so you need to budget for them as well if they are not new. All those small things can add up to a big cost if you don’t plan ahead for them.
Buying a bigger house and upsizing house in the current market might be a good idea “depending” on your local market. Upsizing home doesn’t necessarily mean buying a more expensive home, in some cases you might upsize but the home can be cheaper, depending on where you move to. Before you upsize your home, you need to plan ahead for the costs that are involved with buying a bigger home.