It’s tough finding houses for sale under $500,000 in Toronto. With recent mortgage rule changes affecting affordability, this price category will become even more popular.
Condos are plenty in this price category. But we’re not going to look at those. We are going to look strictly for freehold townhouses, semi’s and detached homes in Toronto.
Before we start looking, let’s talk about why it’s going to be tough looking for a home in this price range.
Demand for houses for sale under $500,000 in Toronto will increase (even more)
If you’re buying a home with 20% down, buying one in Toronto between $500k to $600k is already challenging. Multiple offers are the norm. Inventory is scarce.
With the recent mortgage changes, buyers with a bit over 5% down who were looking for homes in the $600k to $800k (because their income could afford it) are now in a crunch.
The interest rate stress test means they can no longer afford what they could have before the rule changes.
So now they’re shopping in the same price category as those with a larger amount of downpayment.
Where do you even find a $500k house?
Detached home prices in Toronto are well over $1 million. So finding a $500k house, whether detached, semi or town, depends on which area of the city you’re looking at.
Outside Toronto (such as in Durham) you can still find decent homes in the $500k price range. But recent jumps in Toronto house prices have pushed city dwellers out to the suburbs, causing price increases there as well.
Let’s do a search for detached homes in Toronto up to $500k and see what we find. Keep in mind — these are listed prices. In some areas, homes will sell anywhere from $50k to over $100k over asking.
Detached homes
As of the moment I write this article, on October 24, 2016 just past noon, there are 14 detached houses for sale under $500,000 in Toronto.
The lowest priced one, a 2 bedroom in the Rockcliffe-Smythe neighbourhood at Jane and St. Clair, is priced at $359,900 with offers considered this coming Thursday.
It is, however, a major fixer upper and sold as is. Furthermore, there’s no hydro service (at the moment).
In Malvern (Scarborough), a three bedroom detached home listed for $499,900 just sold conditionally (update: it just came back on the market).
It’s at Sewells and Brenyon Way, just off highway 401.There is a condo fee of about $100 per month, since the detached home has a common elements component to it (driveways, parking, etc.).
Where you’ll find them
If you look at the map below, you’ll see that $500k detached homes are concentrated in very specific parts of Toronto. They’re not scattered throughout.
You may be wondering — are these ‘good’ parts of the city to live in?
Well, there’s a whole lot of opinions. Higher priced homes in certain neighbourhoods are priced that way for a reason.
But if you’ve ever asked anyone who lived in Malvern how they like it, they’ll tell you it’s great. Before making a judgement call on a particular neighbourhood, do your research and don’t just rely on what the media says.
Side note: as a Scarborough real estate agent who moved from Mississauga, you can be certain I’ve heard all the stuff people and the media have to say about Scarborough. But I’ve been living here for almost a decade now and find it an amazing place to live.
Let’s look at some of these houses.
Here’s a detached home priced right at $500k (expect multiple offers) at Eglinton and Keele in the neighbourhood of Keelesdale-Eglinton West.
It has one bedroom on the main floor, two bedrooms in the basement, a pretty decent 25 feet by 110 feet lot size, and a decent interior.
A comparable home sold in spring of this year for $540k, with two bedrooms on the main floor and one in the basement. Similar lot size, but the interior was very much renovated.
It’d be fair to say the home currently listed could sell for just slightly over $500k. (Definitely won’t touch $600k territory.)
Townhouses
If you’re going to buy a home in the next year or two, and your a first time buyer, it’ll likely be a condo or a townhouse.
Freehold townhouses under $500k are still very attainable in Toronto. But they’re very scarce. As of this moment, only 9 freehold townhouses are listed under $500k in the entire city of Toronto, and most of them are in Malvern.
There is one 3-bedroom townhouse available in Little Portugal with three bedrooms. At $399k, it’s a fixer upper for sure. There are no photos of the interior on the MLS.
Here’s what it looks like from the outside:
A warning: it is being sold ‘as is, where is’ and if you’re a first time buyer with no fixer upper skills whatsoever, just avoid it.
They are taking offers, so it will likely sell over asking. But instead of this townhouse, let’s look at what Malvern has to offer.
Townhouses in Scarborough
Here’s one of the townhouses for sale in Malvern right now:
It has four bedrooms upstairs, one in the basement, decent interior, and convenient location at Markham and Finch.
Scarborough has always attracted many first time buyers because of the price values of their homes. This one is not an exception.
Many immigrants to Canada who are accompanied by their families go from renting apartments to buying their first homes in Scarborough.
Here’s another townhouse with three bedrooms located at Morningside and Sheppard, again in Scarborough.
And here’s a three bedroom townhouse at Victoria Park and Danforth:
It’s a freehold end unit, near the subway, but if you look inside you’ll need to do some work to make it your own (think: old fashioned kitchen).
If you’re looking for townhouses, and don’t want to go outside of Toronto, $500k will get you a place within Scarborough. The only other alternative is to start looking into Durham.
How about semis?
Right now there are 10 semi-detached houses for sale under $500,000 in Toronto. And here is where you’ll find them:
Have a look at this 3 bedroom semi at Jane and Weston:
The interior is beautifully renovated throughout. Dark wood floors. Modern kitchen with stainless steel appliances and dark cabinets.
Detached homes have sold up to $550k in this same area recently, so it is realistic to think that a semi could go for about $500k or slightly over, if you can afford it.
Here’s another semi to look at:
At $499k, it has three bedrooms, a decent interior, two kitchens with separate entrance basement.
What’s the next step?
There is a mere handful of listings of houses for sale under $500,000 in Toronto. This makes it competitive for first time buyers looking for homes in this specific price range.
Looking to get a decent sized house in great condition, with living space and a nice sized lot? You’ll have to start considering options outside of Toronto and into the suburbs.
It’s not impossible to find a home under $500k. You’ll have to adjust your expectations and act quickly.
Feel free to ask me any question if you’re looking for a home in this price category.
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