The Toronto housing market in 2022 has already seen dips mainly due to an increase in rising interest rates. As a result, people are looking for alternatives such as renovating their existing home.
Current housing market predictions for 2022 suggest a continued downward trend in homes selling below the asking price. Let’s look at the how a renovation can save you money.
Toronto’s Housing Market Dip in 2022
In addition to the global pandemic influencing housing prices, lending rates are also to blame. An increase in mortgage rates from financial institutions have seen negotiated rates delay, or stop, home sales.
To understand the significance of house prices in the Toronto area, consider the Toronto Regional Real Estate Board’s April report. Sales of houses have fallen 27% on a monthly basis, with a 41.2% drop at the same time last year.
What’s in store for the rest of 2022 and will the Bank of Canada be able to balance rising inflation and economy restart programs? That remains to be seen. But the housing market predictions for 2022 suggest a Canada housing market crash.
This is why a home renovation might be a better idea compared to searching of an affordable new home.
Why Is a House Renovation a Good Idea Now?
Despite this being a “down” time in the housing market, it may be the best time to renovate your existing home. The housing market may enter a boom period soon, but no one has a crystal ball to predict when the time will be right to sell.
For now, consider renovations to ease your way of living while investing into your home for a sale in the distant future. By increasing and/or improving your living space with an addition, a second-floor remodel, or by underpinning, the pros outweigh any potential risks.
Buying New Is Expensive Compared to a Renovation
With respect to home renovations in Toronto, the costs can be much lower than buying a new home. Moving expenses, land transfer taxes, and realtor fees are only a drop in the bucket when it comes to buying a new home.
Yes, renovations can cost a pretty penny. But, in the end, you have a home remodelled in a way that perfectly matches your lifestyle and needs. It can also help increase the value of your home for a sale when you are ready to move.
Underpinning Can Add Extra Space
For a full home renovation in Scarborough or other parts of the GTA, consider having a basement underpin done. This method of expanding the existing home structure is beneficial when the land available is not sufficient for an addition to be built.
The cost of underpinning is significantly lower than building a second-floor or an addition. Underpinning also offers a huge reduction in costs when compared to moving to another house.
Adding a New Floor Will Add More Space
Homes within the appropriate zoning can see a sizable increase in property value with an addition of a second-floor. Families who love their present neighbourhood can use the existing space above the home to build a third or fourth bedroom.
The addition of another floor, where applicable, can improve the lifestyle of each home occupant while saving you money. By building up, the renovation costs are only a fraction of the costs to sell, buy, and move to another location.
A New House Will Still Need Remodeling after Buying
One crucial benefit to renovations on an existing structure is remodelling the home you love into your dream home with a low cost. The same money you would spend on remodelling your existing house would need to be put into updating the new home, on top of the moving and buying expenses.
When moving into a house, it is guaranteed there will be improvements or changes to be made. Rarely is a house sold as is where a family can move in without some form of renovations to be done.
Selling at a Lower Price to Buy a New Home Is Not Profitable
With an old home renovation, contractors are often hired to update the plumbing and electrical while improving the overall aesthetics with modern features. This can enhance your lifestyle and increase the value of the property.
Selling an older home, with or without recent renovations, at a lower price for a quick sale to buy new is not always feasible nor profitable. This is a common mistake homeowners make with renovations.
Renovations During the Housing Dip Will Increase the Price
One misconception with renovations during a “housing dip” is the idea of losing money on a home intended to be sold once the market is stable. Let’s be clear. A renovation to a home is an investment in the home, regardless of the current housing market.
A renovation allows a redesign to fit the needs of the household while increasing the home’s value. During a “housing dip”, resources may be easier and cheaper to obtain which translates to more renovation for your dollar.
A Renovation in a Prime Location Makes More Sense Than Moving Farther
Why lose out on prime real estate and all of the work put into a home over the years only to sell for a bigger house? People tend to invest in a home dependent on the location and how it relates to their immediate living situation.
Instead of moving further away from the stable environment the home occupants have created through neighbourhood friends and nearby amenities, change the home, not the location.
Contact Elite Construction and Renovations for Hassle-Free Home Renovations
For a no-stress renovation, talk to the design and building experts at Elite Construction and Renovations. Rely on our promise to deliver high-quality work without compromise for your renovation project. Let us help you rediscover why you fell in love with your home! Contact us today!
ABOUT THE AUTHOR
Jay McDonald, general contractor and owner of Elite Construction & Renovations, has over 20 years of construction experience. He has completed various Ontario Building Code and Business Management courses from George Brown College and has managed over $50 million-dollars-worth of construction in his career.