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Your expectations are unreasonable if not downright ridiculous. No Canadian bank will lend money with no down payment to a foreigner to purchase a property. You will be looking at likely 30% to 40% down payment and will need proof of strong finances and employment.
Good luck. I would suggest not buying at this time - the market is in a bubble in the GTA.
Thanks all for your help. I really think my project can be achievable. However, I still need information on decision to use an agent or not. I am flying the next month to Toronto. Do you know what location I should check first?
Thanks all for your help. I really think my project can be achievable. However, I still need information on decision to use an agent or not. I am flying the next month to Toronto. Do you know what location I should check first?
With all due respect Elizabeth, I encourage you to do your own research but think about the following. We are tying to give you good advice.
-You do not have sufficient downpayment money to put down. This is not the US circa 2005, rules are stricter here. $10k is nothing, property tax alone per year is ~$3K. I don't know all the facts of your financial situation (i.e. income and debt) but $10k in savings doesn't sound like you are in a position to buy. Closing costs and funishing will eat up a good chunk of that alone.
- Google any Toronto real estate agent, call any of these guys up today and hear what they have to say about your situation. They are biased but they will not waste time on your if you don't have money. Good quick test.
- Timing couldn't be worse from a Market perspective. Google "Financial Post Toronto tops New York in terms of Housing bubble" to get a quick snapshot of the situation. Now is not a good time to buy a condo in Toronto, which is what your price range suggests.
- Renting is not going to work at these prices and since you a foreigner, you may have added tax implications and perhaps increased requirements (i.e. put more cash down which you don't have which would depress any return). You're an MBA so have the skills to get the facts, do the financial analysis, and see for yourself.
- Also be aware that in Canada, you cannot deduct Mortgage interest, which makes things a more expensive than the US.
- Toronto has many diverse areas to choose from and you will not know what you like until you get here and experience it firsthand so it's better to move here first. It all depends on you but High Park, Yonge & Eglinton, Yonge & Davisvile, Yorkville, or King West may work a young professional. Queen West or Ossington if you want a more hipster scene. Maybe you want something more suburban. And it also depends on where you work! You don't want to buy and live on opposite ends of town and have to travel 1.5 hours, it could happen.
By the time you move here in a couple of years, you'll have more money saved, you have time to feel out the city and figure out where you want to be, you'll also have time to figure out if you want to stay here for the long-term (if not, buying and selling in less than 5 years is a waste of money, you're better off renting) and you'll give the market time to work out the supply gut and probably get better deals than today's prices. You will also figure out where you are going to work. This is the prudent thing to do. I wouldn't try to pursue this with an angle to make money b/c you are the last one in the herd right now and there are so many factors working against you. Real estate is first and foremost a place to live.
Trust what folks have said here. During your trip here, assuming you want to live near downtown, and want a condo apartment or a townhouse, I would suggest checking out Liberty Village in the west end and the Yonge and Eglinton area, both of which have lots of condos. Make a point of visiting neighbourhoods like Little Italy on College St., the Annex, the Beaches, perhaps High Park. You can do some googling of prices in those areas, and you will see they are very high.
Banks here are very conservative--you can not buy a house without a down payment, and if you want it insured by CMHC new rules say you need a 20% downpayment.
If I were you I'd wait. I don't believe we're in a bubble exactly, but I'm convinced that the market is going to cool down--not a great time to buy.
Last edited by Wwanderer; 07-27-2012 at 10:22 AM..
Thanks all for your help. I really think my project can be achievable. However, I still need information on decision to use an agent or not. I am flying the next month to Toronto. Do you know what location I should check first?
I understood what you said and may be you are right. I decided to wait and see the next year. Everything can happen, right? I realized most people who gave me advices are not economist or in financial industry or realtors. You just read newspapers and decided to give me your opinions. I am totally ok with that. I also read some links you sent. Again, I want to thank you for that. However, I still believe, it is possible for me to purchase a condo or townhouse without downpayment or with my 10k downpayment. I understand banks prefer to lend to financial secure people because of the actual economy crisis. Nevertheless, these financial institutions want to get rid of all these foreclosures homes or houses on the market. I can not afford now to wait two more years. Even though I can not purchase my future home in Toronto, I can still purchase it somewhere else. It is unfortunate to learn how people are so negative on the net when they have to provide advices. Do not take it personally but are you dealing with your own securities? Do you hate foreigners? It is not they said no to you that they will to me. And if it is the case, why don't you give me better advices than wait 2 more years or having more downpayment? I provided a price range because I don't know or I suppose. I will travel soon to your country and check the different area I am more comfortable with in order to begin my project. I may find affordable condos. Thanks again for your ' assistance'.
... I realized most people who gave me advices are not economist or in financial industry or realtors. You just read newspapers and decided to give me your opinions. I am totally ok with that. I also read some links you sent.... I understand banks prefer to lend to financial secure people because of the actual economy crisis. Nevertheless, these financial institutions want to get rid of all these foreclosures homes or houses on the market.
Well yes, if you wanted a financial advisor, you could hire one. This forum is by definition people who are just giving their opinions, although some of those opinions are well-informed ones.
There are no foreclosures to get rid of here. Yes, I'm sure people do default on their mortgages here in Toronto, but they are few and far between. It is not the US market! We have government regulation of our banking system here--the banks can't just do what they like.
LOL, elisabeth... I can GUARANTEE you that you will NOT get a mortgage loan to buy a condo with $10k down payment or no down payment. $10k won't even cover the closing costs. Ever heard of land transfer tax? And attorney fees? You really are amusing - why would you ask for advice on this forum if you seem so sure of yourself? Why not just go ahead and try to buy a place? Come back and give us your story!
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