[afransen]

the question is what will 500k buy you in the city in 5 years? I'm thinking not very much...

Keep in mind that the present rate of appreciation is likely unsustainable in real terms. Who knows when it will happen, but there will need to be a correction in prices if real estate is to remain affordable. Rent:income ratios have been rising, and haven't corrected in Canada like they have in the US.

 

[TrickyRicky]

"I'd try queens quay if you work downtown. Prices will go up 25% by 2013 when the harbourfront revitilization is complete."

This is entirely plausible. However, it is also plausible that 2013 prices will not exceed 2009 levels and properties will be difficult to sell or re-finance under favourable terms.

It probably makes sense, given your age, to be slightly irrationally optimistic and believe the favourable scenerio. The reason is that the downside risk is only that your financial plan will be delayed by some years (you can afford this), and it is easier to solve a problem with constraint boundaries. It is easier to come back from a set-back if that set-back produces a defined goal.

 

[EXgeMMy]

I'm in a similar situation.

My fiance and I have a combined income of $120K. We have savings of roughly $100K.

We have a max budget of $350K but to be realistic I would rather keep it much lower between $300-330K.

Finding a "decent" condo in the $330K range has been difficult. The only ones that are affordable are older buildings (by affordable I mean they most likely will include parking).

I see this as our first home and I'd rather build equity as opposed to finding a place that we can "afford".

Our goal is to get a house in 3-5 years hence I'd rather just keep the purchase price as low as possible.

We even started looking at other areas e.g. yonge/sheppard-finch and there prices are also getting a bit high. Both Gibson Square and Bravo which are new constructions the smallest units are going for over $300K with no parking. Those are crazy prices.

We're going to wait until January and then decide what we should do, but I honestly believe it might be better for us to rent for now.

I should mention that we are getting married in June so we wanted a home before that happened but again maybe it's best that we wait until after the wedding when interest rates go up and HST kicks in.

We had bought a unit at West Harbour City but in the 10day period we realized that although the price point was not bad $327K, there was no parking and there was no easy way of getting groceries nearby. That Loblaws was announced 5 years ago with no movement. I'd rather be close to a subway line. Streetcars in this city are unreliable.

 

[Urban Shocker]

Why bother buying a condo at all if you're planning on buying a house in 3-5 years?

 

[EXgeMMy]

Why bother buying a condo at all if you're planning on buying a house in 3-5 years?

As finding a house under $400K in an area we'd be comfortable is a bit difficult.

or are you suggesting we rent?

 

[urbandreamer]

^Yes. Rent a cheap apartment, not some $1500-$2000/month condo. For example, a one bedroom in High Park area averages $1000/month, much better value than buying a 1 bedroom condo in today's market. Btw, one bedroom's in my building average 800SF, much larger than today's one bedroom condos.

$500 per person per month for rent all inclusive. Couple can save at least $25,000/year over 3-5 years... Add that to your $100,000 in savings and that's enough for a hefty down payment on a decent-sized/located house.

 

[EXgeMMy]

^Yes. Rent a cheap apartment, not some $1500-$2000/month condo. For example, a one bedroom in High Park area averages $1000/month, much better value than buying a 1 bedroom condo in today's market. Btw, one bedroom's in my building average 800SF, much larger than today's one bedroom condos.

$500 per person per month for rent all inclusive. Couple can save at least $25,000/year over 3-5 years... Add that to your $100,000 in savings and that's enough for a hefty down payment on a decent-sized/located house.

To be perfectly honest, renting has crossed my mind. I am in the boat of believers that a correction is due. I don't think a collapse is going to happen, but a mild correction is what I think will happen. At the very least when Interest rates go up, HST kicks in and more inventory come online it should at least cool.

My future wife actually pays $675 in rent right now. she has a roommate for $1350 total in an area that would both benefit us right now. If I move in we'd kick the roommate out but $1350 is still pretty reasonable.

We could possibly lower it if we moved into a basement apartment in the same area.

I'll have to crunch the numbers a little more.

 

[trip_fontane]

If I am wearing your shoes, it would probably be safe to assume I've got your wallet and credit cards as well, so I'd be spending the lot