Buying a home in good old Toronto is the largest investment any Torontonian (and of course, a Canadian) will ever make in their life. Yes, it is like a dream come true. However, apart from being aware of things that can raise a property’s value, awareness of the factors that can bring down its value is fundamental before first-timers make a purchase.
It is hence time that we all discuss the various factors worth considering whenever first-time buyers are buying or selling a property that can affect the value of a residential property.
What are the Factors that can Decrease the Value of a Residential Property?
Believe it or not, Toronto has grown monumentally, and it is growing fast. Being among the largest population centers of the Americas and the world, it is an economic center and the center of Canada’s building and skyscraper boom.
Despite mixing apartment buildings in residential lots with a bit of commercial space to curb urban and suburban sprawl, the sprawl has gone beyond the city’s traditional boundaries, to an extent that the Metropolitan area of Toronto is now among the largest in the world.
Anyone living in Markham, Oakville, Brampton, or Ajax takes the expressway to come to work in Toronto, provided their office is anywhere in the city proper. The expressway has somehow made it easy to reach there but with population growth comes a growth of individual vehicles purchased.
Toronto has been battling to curb the urban sprawl and traffic issues through the construction of apartments, lofts, and condos in the city proper. Other than that, listings of Toronto condos for sale are being updated as we speak, though the COVID-19 pandemic slowed down the market.
Now the market has started to thaw.
Yet, each step should be taken carefully because the market is a slippery one. Prices are not buyer friendly and sellers need to keep their properties in good shape. With a vacant property tax being favored by the Toronto city council, homeowners are now in a lurch.
Nevertheless, let us now discuss the factors which can potentially decrease the value of residential property:
A Rise in the Mortgage Interest Rates
Mortgage interest rates are a deciding factor for both buyers and sellers in the process of buying/selling a home. High-interest rates will result in buyers being more likely to wait as their monthly carrying expenses will be high.
Sellers need to reduce their price, so their home gets listed because prospective buyers are hard to come by. The market is uncertain, it fluctuates and rises again. With suburbs outside the city proper becoming an attractive option, time for potential buyers and sellers to consult their realtors to see what can be done to make the most of the market.
Short Sales and Comparable Listings Bring Down the Home’s Value
A neighborhood having foreclosures, short sales, or both; is bound to have its properties’ values go down by a considerable margin. The more homes nearby are being listed, the more the property the seller has will lose its value. The same goes for condos.
Buyers will hence look at comparable listings in the area. This means sellers will need to compete with more sellers. Hence, they should be more competitive with their property’s price.
A real estate agent can carry out comparative market analysis in ensuring that the property is listed at the correct price. They will also implement a well-developed marketing strategy to sell the home as fast as possible.
Curb Appeal is Quite Important
For sellers selling their home, curb appeal is very important as it is the first impression they are giving to potential buyers. Everything must be presentable and in good working order as well as being safe too.
This goes for all homeowners in Toronto selling either a home or a condo. Home sellers should fix the gates and fences. For condo owners selling their condo, they should carry out all major and minor repairs at all sides.
No one can believe that such can make a difference in the property’s curb appeal. Adding a fresh coat of paint to areas like doors, porches and other areas help. Now that we are in the winter, condo owners need to check all doors and windows to get them fixed.
Repairs and New Aesthetics for the Home’s Interior
A home’s interior is its main selling point for a lot of people. Hence sellers should ensure that the finishes and furniture on the inside of the home appeal to a wider audience as it is important. If the property does not appeal to a wider audience, it won’t sell easily.
Hence, sellers should avoid cluttering their home with loads of family photos as it can become hard for potential buyers to imagine and envision themselves in that home.
One way to sell the property through an increased appeal is to stage it with the help of professionals. Working with a dedicated real estate agent helps in this regard. Electrical repairs are important and so are repairing plumbing, bringing in a new HVAC system, and removal of mold.
Rankings of Schools Nearby
Buyers having children or planning to have one love being in an area having the best schools. Reputable schools drive property prices upwards in the positive zone. This also signifies the fact that parents are more than willing to pay a decent amount to educate their child in a decent institution.
A school ranking in the top-10 ranks is something most parents often observe. Sellers living in an area having a low-ranked school need to be wary and should visit the school and ask about any extracurricular activities and after school programs they have. This is a crucial selling point for the home listed.
The Location of the Area
Most of the time, buyers consider things desirable for the situation when they are buying a home. Proximity to amenities, transit, entertainment, markets, and major expressways counts a lot. However, these are just the tip of the iceberg. Inner-city areas are near to major streets instead of highways or expressways.
For those who commute to work daily from a suburb, being close to a major highway or expressway is desirable. Those who go to work from an inner-city suburb need to find a bus stop or a subway station nearby.
However, there are some things on the other hand which are game-changers. Noise generated by traffic on the roads of the city proper can be a problem. Hence, buyers should always research the neighborhood for upcoming construction projects before they intend to purchase. This gives them a good idea of future developments whether or not they affect the value of properties there.
The Economy of that Area
The economy’s situation goes directly with real estate. Change of employment in the area, conformity, supply, and demand are among the variety of factors that affect any area’s economy. If the market of an area has a faltering economy, people will be forced to sell their homes which creates a rise in inventory levels and puts prices in a downward spiral.
Conformity is a must because no one can build a bank’s HQ in front of a tract of single-family homes. This will negatively impact the prices of the area because of non-compatible land use. Also, in terms of supply and demand; if demand rises and supply either falls or remains stable, the value of the property rises. If the supply is stable or goes high with demand falling, the property’s value falls.
Keeping all these factors in mind, homeowners should work with an honest and dedicated real estate agent so they can explore viable neighborhoods and save themselves the stress of exploration. They can also be aware of any risk that the area poses.