Let me ask you a question...Have you ever wanted to kick yourself for not trusting your own intuition? Perhaps you've heard the expression - 'your own worst enemy.' Well I'm here to remind you that when you work hard to understand the value of something and then question your own ability to make smart choices, you my friend could be sabotaging your own future not to mention - your financial well being.
If you keep waiting for tomorrow to arrive then you will end up with a pocket full of yesterdays. I could have bought that house for $300,000 and it is on the market for $600,000 today. BUT my income hasn't doubled. Well let me be among the many to remind you that when you snooze your lose but when you snore - you lose so much more.
Buyers are running around looking for places in the sand to bury their heads. They are panicking about HST, Land Transfer Tax, prices tanking and dropping. Well pull that head and that butt out of the sand because I am here to tell you that TODAY is the best day to buy a home in Toronto and the GTA.
Why?
Why you ask?
Not because I say so but because if the writing on the wall were any bigger or any brighter then you would be sitting in the middle of Time's Square going blind by the light.
Firstly, thanks to the media and some silly scare tactics, there are too many folks out there believing that HST applies to all home sales - most of which are resales of existing properties. That is just not the case. This tax applies to new construction and there may be provisions where that cost has been factored into the buying price and adjustments might be made with assigning rebates to the builder - this is when you want to make your lawyer work for their money in explaining it to you.
HST does not apply to the purchase price of a resale property - period. Oh you will have to pay HST on services such as the legal fees and inspections but that is a far cry from the cost of the home.
Our new mayor has promised to remove the Land Transfer Tax for the City of Toronto - probably, maybe, for sure, 'on and of his own accord'. Well we'll see how many of his promises he will deliver and how much his council will support his bravada and if so - WHEN. Let's face it, that dreaded tax is in place for the purpose of addressing the expense of running this large metropolis and if you delay buying a home because you think it will disappear - I'm warning you right now and big time - it will cost you more in the end to wait for that tax to vanish. Because by the time it is gone, the price of homes will have gone up significantly. And while that house will be costing you more - the interest rates will likely have gone up from this rock bottom place they are now - and those rates will be costing you more TOOOOOO!!!!!!
Are you getting my drift here? Buying today at great prices, good interest rates, with decent inventory will still save you money, even if you have to pay a municipal land transfer tax which doesn't apply to the first $400,000 of the price for a first time home buyer!
Prices don't really drop in our fair town - they just stop escalating. For the most part, we typically see more activity in the first half of the year - more inventory, more sales. So if you wait until the Spring to buy, guess what - so are a whole bunch of other people. And that only means that you will be lining up to compete for your dream house. And when you have to compete, then you can expect to pay much more than the list price. And if you are already complaining about additional expenses - then why do you want to pay higher amounts of land transfer tax for a house that you could have paid less for during the 'slower' period - like NOW.
Our lovely city is far from reaching its saturation point in terms of house prices. Costs to buy will definitely increase. Oh the pace may be slower during some seasons and it may even stop here and there for short periods. But as my old granny used to say...'mark my words,' there is still room for appreciation of housing prices in Toronto. So do you want to be on the end of the savings over tomorrow's cost or do you want to be the buyer who has to spend $600,000 for the $300,000 house that could have been purchased three years ago.?
And while we are at it. How did your mutual funds do over the past five years? Have you recovered yet? Well had you bought the right investment property or even new construction during that time, I can assure you that there was a nice ample return on your investment. Of course if you bought a dump in a tired area and didn't do anything to improve and nurture your investment - well my friend, you will reap what you sow and garbage will always begat garbage.
New construction in strong areas can be very beneficial. Firstly it forces you to save through investing your down payment up front (which comes back when you sell), and then with the right address you will likely see some upper double digit increases - even three figure gains. Join those two together through a sale and you have just delivered a sweet capital gain which is more than my mutual funds bought to the table.
There is so much to learn when purchasing a home and being well informed can buy you peace of mind. I'm here to remind you that he who hesitates - ends up paying through the nose.
Stay tuned for upcoming reports on humorous experiences which might just teach you a lesson.
