Why does the value of a home differ drastically from one area to the next? Here are a few reasons why it is more expensive to live in some cities.
- Supply and Demand. Over the years, Toronto and Ontario have experienced an increase in population due to job transfers, new opportunities and immigration. This creates a very buoyant buyer’s market especially in the Greater Toronto Area. This simple law of economics is very hard to controvert despite the pace of condos being built.
- People, Businesses and Jobs. Areas offering higher paying positions giving residents the ability to support larger mortgages creates a pool of wealth that increases home prices.
- Country vs. City. In a city, you pay for convenience! The price of rural properties is lower as it takes into account the time and cost of commuting to work, and the lack of various social networks and entertainment.
- International Interest. The world agrees that Canada is a great place
to live! Savvy foreign investors tend to choose real estate where the odds of growth are greater than the risk. Popular hot spots are larger cities such as Toronto and Vancouver which increases the price of homes in those areas!
At the end of the day, your house is a home not just an investment. It may be hard to understand the drastic differences in regional housing prices, but keep in mind that the most important aspect to consider when buying a home is to love the location.
Text by Joe Mancuso