When speaking with buyers, particularly first time buyers with very fixed budgets, I am often asked if they should wait to make a purchase. Again and again I will hear statements like, “this market is overheated”, or “this can’t last forever” or (best of all) “prices HAVE to go down”. I wish this was true, for all the bargain seekers, but all evidence points to the contrary.

With interest rates holding steady until 2015 at minimum, and more active buyers than ever in Toronto, prices will continue to shoot up like Mercury on a hot day. The sales data for 2013 was just released, and it tells a familiar tale. According to TREB (Toronto Real Estate Board), the average selling price as a whole in Toronto was $523,036. In 2012 this figure was $497,130, for a year over year increase of 5.2%.

The Numbers

What this means is that the potential buyer “waiting out” the market is really just throwing away money each day they delay. As the numbers above illustrate, a house that cost $497,000 in 2012 cost $523,000 in 2013, and it will cost $550,000 in 2014. That isn’t going to change. Worse yet, assume this same buyer is paying a relatively modest $1200 per month in rent. Add this up over a year and you have (or rather don’t have) $14,400 – a disheartening amount of money to pay towards somebody else’s mortgage.

Meanwhile, if a buyer doesn’t jump in and make a purchase they are missing out on the best investment there is. Consider the scenario of purchasing a $500,000 house.

That’s a lot of fish tacos!

So if you have the means and desire, get in the game and make a purchase! In the Toronto real estate market good things don’t come to those who wait.