Buying a home is a big investment, and it's important to think about the long-term implications of your purchase. Here are some things to consider when thinking about the long term:
- Resale value: While you may not be thinking about selling your home before you've even purchased it, it's important to consider the potential resale value. According to the Canadian Real Estate Association (CREA), the average resale price of a home in Canada in 2020 was $607,250. When choosing a home, think about how its location, size, and features may affect its resale value in the future.
- Growth potential: Is the neighbourhood you're considering experiencing growth or decline? According to the CREA, home prices in Canada increased by 17.3% in 2020, with the largest gains seen in smaller cities and rural areas. If you're looking for an area with growth potential, consider locations that are seeing an influx of young professionals or new businesses.
- Maintenance costs: Homeownership comes with ongoing maintenance costs, such as repairs and upgrades. According to a survey by CIBC, Canadians spend an average of $11,800 per year on home maintenance and repairs. When choosing a home, consider the age and condition of the property, as well as any potential maintenance costs in the future.
- Mortgage term: It's important to think about the length of your mortgage term and how it will affect your long-term finances. According to the Bank of Canada, the average mortgage rate for a five-year fixed term was 2.24% in 2020. Consider how much you'll be paying in interest over the life of your mortgage and whether you'll be able to afford your payments in the long term.
- Future needs: Finally, think about how your needs may change in the future. Will you be starting a family or working from home? Will you need a larger or smaller home in the future? Consider how your needs may evolve over time and whether the home you're considering will be able to accommodate those changes.
By considering the long-term implications of your home purchase, you'll be able to make a more informed decision and ensure that you're choosing a home that will meet your needs both now and in the future.