The value of homes in Toronto, rose by roughly $120,000 in the last year. Depending on your salary, selling your home in 2016 likely made you more money than your wages for the entire year did. If it was a close call, your house probably still made more as your salary is subject to income taxes whereas profits made on the sale of your home are not.
Most homes increased in value by more than the average Ontario resident’s salary in 2016. Houses that would have sold for an estimated $635,000 exactly 12 months before were seen selling for around $762,000, which was a whopping 16.7% annual increase.
And even if selling property didn’t produce a profit that was greater than the homeowner’s salary, sellers in the last year have still made tremendous profits through home ownership and this is expected to continue increasing at an almost alarming rate.
The money gained from this trend in the market is, of course, only seen when the appropriate action is taken. Profits will only be realized when equity is pulled or when you sell your home. It is also very dependent on the market at the time you choose to take action, but there isn’t currently any reason to believe that the bubble our market is in will pop – at least not any time soon.
This trend will also be affected by the state of your home and its market value. If you have put in any necessary work for repairs or renovations, live in a great area, and know how to market and stage your space, you won’t need to worry about the profit you’ll see from your home as much as where you are going to spend it!
You may be thinking of selling your home to cash in on its increased value, but you need to consider why you’re selling. If you are looking for a new home, you need to consider that while the value of your house has increased, it’s done the same for every other place up for sale. Cashing in on your property may make you feel incredibly wealthy when the cheque comes in, but if you’re spending way more money than you’re making and not getting much more out of your next home, you may need to reconsider your plans.
There are other options like cashing in on some home equity or renting your current place after you have found your next dream home. This extra income can make its way into your wallet without you necessarily making your way out of your current living space.
Additionally, if you’re considering buying, it may feel a bit intimidating. You may be nervous to purchase with housing prices as high as they are. However, this trend is only expected to continue so if you’re looking to purchase, it’s best to get in while you are still able to. If you think buying is scary now; just wait.
Questions? Call us! We can help you whether you’re selling your current home (Cha-ching!), or looking for your next big purchase (Score!).
The Raymond Yong Real Estate Group is always available to walk or talk you through it at (416) 906-9863 or [email protected].
