Tips for First Time Home Buyers – Top Q&A
Tips for First Time Home Buyers – Some Key Considerations & Observations
Here is a recap of an interview recently done by thepointer.com with Pratham Kalia, Sales Rep, RE/MAX Real Estate Centre Inc. Pratham regularly works with Team Kalia and has been servicing buyers, sellers and investors as a full-time Realtor since 2016. Pratham actively works in Mississauga, Ancaster, Milton, Hamilton, Burlington and Oakville markets.
Pratham has answered questions to some of the currently relevant situations & considerations for first time home buyers looking to make their first home purchase in Mississauga & area.
What is the lowest or a good ballpark for a first-time home buyer to have for the housing market in Mississauga?
As per TRREB (Toronto Regional Real Estate Board) Reports, these were the average home prices in Mississauga for the month April 2021:
Detached Homes: $1,518,393
Semi-Detached Homes: $974,375
As evident from the above price indicators, it is not easy for a first-time home buyer to enter the single-family low rise housing segments. Many first-time home buyers are choosing to enter the real estate market by purchasing a condo in the high-rise condo market of Downtown Mississauga (City Centre or the Square One area).
From our most recent sales this month (May 2021) in the City Centre area, 1-bedroom units are selling for approx. $520,000-$540,000, 1-bedroom + den units are selling for approx. $540,000-$560,000, 2-bedroom units are selling for approx. $610,000-$650,000 and 2-bedroom units + den are selling at approx. $650,000-$690,000.
All of these ballpark prices are for condo units that have sold in some of the well-maintained and reputed buildings, for example: Limelight Condos, Mirage Condos, Chicago Condos and One Park Tower Condos.
What amenities really boost the overall price of a house (parks, malls, transit, grocery stores etc.)?
“Location, Location, Location”, this old saying is often heard in the real estate industry when buying or selling homes. It is not uncommon to hear many buyers cite “A+ location” as their top requirement when house hunting. For example, a neighbourhood with a top school district or a neighbourhood in Mississauga with good public transit or connectivity is always in high demand.
This is often a top criteria for buyers who have school-going children or buyers who work outside of Mississauga and are looking for easy access to GO transit or highways. Proximity with conservation areas or parks also boosts the demand and prices of properties.
Younger buyers (couples and/or singles) prefer the convenience of condo and downtown living where everything is just a stone’s throw away – transit, restaurants, entertainment, shopping, dining etc. Downtown Mississauga (City Centre) is a top choice for these buyers. Condo living is a preferred lifestyle for these consumers, as also being able to simply walk to most of the area’s amenities.
Some of our older buyers looking to downsize also choose to buy in the Square One area, Hurontario area, Central Erin Mills area, Clarkson area and Meadowvale area, as condo living provides them with the ease of simply locking up and leaving for sunny destinations during winter months. The condo hub at Central Erin Mills is becoming quite popular with its close proximity to the Credit Valley Hospital, Erin Mills Shopping Centre and other local amenities that this area offers.
In conclusion, amenities close to homes (schools, malls, transit, shopping, hospitals etc.) do help increase the marketability of a property. Since these aspects are important to buyers, they are willing to pay a premium for the home, which in turn helps increase the price of the home. In order to assist hopeful buyers, we provide a brief summary on the different neighbourhoods in Mississauga on our website, as also links to find out which school falls in their area of interest.
Do you have any predictions on where the next “it” place will be for buying?
We wish we had a crystal ball to answer this. However, it will depend on your lifestyle and the property of interest.
As the pricing in the GTA has tremendously increased in the last few years, especially the first few months of 2021, we are seeing many buyers are now looking at options outside of the GTA.
However, for the buyers looking to stay in the GTA, we truly believe the high-rise condo market is going to grow tremendously due to; the spike in price of low-rise freehold properties, the stricter stress tests when qualifying for a mortgage that is being put into place for insured and uninsured mortgages and the limited supply of land for low rise housing.
We expect the high-rise condo market to flourish in the next few years. Also, properties in the $700,000-$900,000 price range are going to attract many buyers, due to the reasons explained earlier. In Mississauga, as of today properties such as condo-townhomes, stacked-townhomes and some low-rise freehold properties fall into this price bracket.
In this case, the next “it” place would include Central Erin Mills (top school district in all of Mississauga), Churchill Meadows (one of the youngest neighbourhoods in Mississauga), Cooksville (very close connectivity to the GO) and Hurontario (prime location with many different types of options for properties).
If someone is looking for a property on the East side of Toronto, then the next “it” place for lower priced properties when compared to Mississauga would be Oshawa, Pickering and Whitby.
If someone is looking for a property on the West side of Toronto, then the next “it” place for lower priced properties when compared to Mississauga would be Stoney Creek, Grimsby, Brantford.
In your work what is the overall feeling for first time home buyers? (excitement, helplessness, defeat?)
We have helped numerous first-time home buyers over the past few years. In my personal opinion, once first-time home buyers get the confidence that they can indeed buy their first home or condo, there is a high-level of motivation and excitement. Many continue to rent, thinking that home buying is way out of their reach.
In our First Time Home Buyer sessions, we guide potential buyers through the entire process, breaking it down in simple language, supported with numbers.
Some of the topics we cover start with the basic amount they would qualify for, type of home or condo that they can buy within the price range, budgeting for one-time and ongoing home buying expenses and closing costs and the neighbourhoods or condo buildings most suited for them.
Depending on their financials and the timeframe for moving in, we also recommend resale or builder new properties and make them aware of first-time home buyer rebates and incentives from the government. Some millennials are definitely feeling a sense of hopelessness when it comes to entering the housing market, or at least the single-family home segments.
However, we are also noticing many millennials getting financial help from their parents, or grandparents in order to purchase a property. Another growing trend is co-ownership, where buyers can buy jointly with someone else.
We are also helping many newcomers that are first-time home buyers that have obtained their PR (permanent residence) or are here in Mississauga on a work permit. Many of these first-time home buyers come with solid jobs and savings which help them transition easier into a home owner.
Which neighbourhoods in Mississauga would you consider “more affordable”?
In the first few months of 2021, the Mississauga low-rise market as a whole has seen a $100,000-$200,000 increase in price. Even in the midst of a pandemic, the housing market has been very hot. It is very hard to label a neighbourhood as most affordable as prices have been going up everywhere due to lack of single-family home inventory across Mississauga.
I think the important question would be, which type of property is the most affordable in the current market?
It is clearly the high-rise condo market in Mississauga and by default it is the City Centre area of Mississauga (and some other pockets elsewhere in Mississauga) that can be labelled as “more affordable” at present.
In my opinion, the current high demand and price increase is fueled by the current low interest rates and limited housing supply in Mississauga. Most first-time home buyers are now buying high-rise condos due to the lower entry price point in areas like City Centre (Downtown Mississauga), Cooksville, Meadowvale and Hurontario. Due to the higher inventory in the high-rise condo market, there is a lot of supply and less traffic when compared to the low-rise housing market.
We also have buyers that are buying stacked townhouses which come with low condominium maintenance fees in areas such as Cooksville and Churchill Meadows.
Lisgar, a Mississauga neighbourhood was considered “more affordable” for the low-rise segment compared to other neighbourhoods in Mississauga in the past few years. We had helped many first-time home buyers move into this neighbourhood.
Do you have any experiences/ stories recently (last two years) that showcase how the market is for buyers?
2021 as a whole (thus far) has been a very active year regarding real estate sales and record high sold prices. Even through a pandemic and three lockdowns, the real estate has seen a lot of activity.
Fewer listings on the market, low interest rates and fear of losing out of the housing market, shaped the market sentiment for hopeful home buyers. As home prices kept increasing, potential home buyers felt like they were in a now-or-never situation to buy a home.
Most homes sold in a crazy bidding war situation and buyers were not competing with a handful of offers, but with 20-40 or even more buyers for the same property. It has been a very frustrating experience for some buyers who may have lost a few homes in this process. Of course, the lucky bid winner may have ended up paying as much as $100,000 over asking for a particular property.
The flip side of the coin is that the last two years have been great for first time buyers, as a matter of fact when you look at the equity generated in the last two years – I wish first time buyers could have bought more than one property, which would have also qualified them as real estate investors.
From May 2019 to May 2021, the price of one-bedroom high-rise condo apartments in Downtown Mississauga and surrounding areas has moved up from $400,000 to $510,000. Similarly, the price of a semi-detached home in Mississauga has moved up from almost $750,000 to $950,000 and in some cases to $1,100,000. Condominium Townhouses in nice neighbourhoods of West Mississauga like Churchill Meadows, East Credit, Hurontario, Meadowvale, Lisgar, Central Erin Mills which used to sell around approx. $650,000 two years ago are now selling from $850,000 to $950,000.
The wealth generated by the increase in equity has helped most of these first time buyers especially in the last 2-3 months to accumulate more real estate by using their equity to buy or invest in second properties or in some cases have helped them to move by selling their properties which they acquired 2 or 3 years ago to a larger property. For example, people who had bought a 1-bedroom condo have now moved to a townhouse, a townhouse person has moved into a detached property and so on.
This is also an area that we focus on, not just helping people buy their first or second home, but also assisting them eventually build equity regardless of the type of market we are in.
Contact Team Kalia if you are looking to Buy Your First Home or Condo in Mississauga