Is Now the Time to Downsize?

Is now the time

to downsize? By Sabrina Cameron

For most homeowners, the idea of ‘downsizing’ isn’t typically associated with excitement. But it should be — especially now.

Most of us think of downsizing as a “downgrade” in our living spaces. But more often than not, downsizing is an upgrade in lifestyle, as many people sell their home for top dollar and trade it in for a boutique condo with all the latest amenities and put money in the bank.

Why downsize now The imbalance between supply and demand was already pushing Toronto home prices up before COVID-19, but the pandemic has increased home equity faster than we could have ever expected. Low interest rates, low inventory combined with people looking for more space to accommodate working from home and home-schooling have driven up demand for single-family homes.

But while there’s been an incredible upswing in prices of detached and semi-detached homes, condo prices have stayed relatively stable. The average price of a Toronto detached home rose 16 percent to $1.6 million since this time last year. In contrast, the average selling price of a condo in Toronto was down 7 percent to $676,837 in February over the same year-over-year basis. This scenario creates the perfect situation for those looking to downsize and capitalize on their investment. Their large properties are rising in price, while the value of condos have declined in price.

That’s not to say that this scenario is expected to last very long, as the condo market did start to rebound earlier this year — especially in boutique buildings.

While condos offer obvious benefits like freedom from shovelling snow, cutting grass, and constant upkeep of your house, they are not your only option where you will benefit from shifting gears.

What could your next move look like? If you own a fourbedroom detached home in the Beach, your value range could be anywhere between $2.5 to $3.75 million. That could get you a twobedroom pied-a-terre condo with spectacular city and lake views, currently ranging between $725,000 to $850,000, as well as a historic farmhouse in Prince Edward County for roughly one to $1.5 million.

Downsizing doesn’t always mean condos There are so many different reasons to make a move: a simpler lifestyle, fewer stairs, proximity to family, freeing up equity, or a combination of all of these things.

Downsizing for some may look like a cottage, bungalow, or a maintenance-free townhouse in a smaller town that’s close to golf, hiking trails, and other recreational activities.

Although real estate outside of Toronto is booming, buying out of the city still remains an affordable option for downsizers. For example, many city homeowners have been cashing out on their million-dollar-plus homes and moved to Prince Edward County for one-third the price, and pocketed the rest to fund their new lifestyle.

Whatever your goals, downsizing can be exciting and a great way to leverage the equity in your current home to fund a new lifestyle. The pandemic-drive real estate boom can give you an extra boost and financial flexibility that would not have been available a year ago.