We all know its not easy being a first-time homebuyer. Finding a property for less than $400,000 can be quite the challenge in a summer market that has been notorious for its bidding wars, even in regards to the most affordable of homes.

With the markets recent low mortgage rates, previous sales records have been obliterated within the past two months in the Greater Toronto Area, while listings have taken a significant downward turn. So where is the answer for the first time homebuyer?

A study was done on the top 10 neighbourhoods recommended for first-time buyers conducted by Coldwell Banker Terrequity Realty, and found that the best spot in Toronto for the purchase of a non-condo property is within the Leslie St. and Finch Ave. area of North York – about as far north of downtown as you can go without entering the 905 region.

Coldwell Banker Andrew Zsolt commented on the fact that many first-time buyer are becoming disheartened with multiple offers flooding the market but advised that there are still neighbourhoods that offer value, but that you have to go farther away from the core of downtown. First-time buyers often have to give up the idea of living in a lowrise property if they want to live in downtown Toronto, but by going a little north opportunities begin to open up.

The area south of Steeles Ave. enclosed by Leslie St. on the east and Pineway Blvd to the west is close to parks such as Cummer and Cresthaven and an accessible subway via both Finch and Steele avenues. $400,000 could buy a semi-detached house in this neighbourhood and condo town homes within the range of $319,000. There is also a nearby Yonge and Finch areas as well as St. Lawerence market that is also recommended for those considering buying condos. The proximity to
public transit, parks and shopping ranked high among public surveys in these areas.

A five year mortgage of 3.95% could afford for potential homebuyers to put 5% down or $20,000 while financing $380,000, working out to a monthly mortgage payment of $1,988. The Bank of Canada has announced its intention to hold rates steady for the time being as rising rates would mean higher monthly payments for the future and may affect the sales prices and volume. However, analysts warn that interest rates will not remain at the historically low levels of today. First time buyers should be especially careful not to bite off more than they can chew. Consumers need to factor in the interest rates of the years to come, three or five years from now as prices will most likely be higher since they can’t really get any lower. Researchers say that rates could easily rise by two or three percentage points within the next couple of years.

What researchers are warning basically is that the reasoning and basis of your decision should be determined not by today’s rates but by what the rates might be in 2012.

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