Should a house without parking be a deal breaker?

I’m going to make a bold statement: just because you own a car doesn’t mean you have to buy a house with parking. In fact, you may end up saving money by buying a property without a parking spot.

At one point in time, I said I would never buy a house that didn’t have parking, but that’s exactly what I ended up doing, and for the time that I owned the house, finding parking wasn’t ever a problem - and it was smack dab in the middle of downtown.

It’s pretty common to find homes in the older part of Toronto being sold without dedicated parking because the homes were built before cars were ever a consideration. For many years, homeowners solved the problem by converting their lawns into front pad parking. The problem is that front pad parking comes with drainage issues, aesthetic problems (they’re ugly) and the fact that every new parking pad effectively removes at least one street parking spot.

There is currently a moratorium on new parking pads in the old city of Toronto. Homeowners outside the city can apply for permission to build a parking pad, but it often takes years.

Fun fact: You may buy a home with a licensed front parking pad, but the license does not follow the property. You’ll have to apply to have the license agreement transferred.

There are obvious benefits to having a parking spot, including not having to circle the block, hunting for a spot. As well, people feel it’s safer to park their car right by their house, but let’s be honest, if someone’s going to break into your car or steal it, a few steps either way isn’t going to deter them. Many years ago, I owned a house in prime Cabbagetown that had laneway access to parking and the car was broken into four times – so having a parking spot is no guarantee that your vehicle is safe!

How can buying a home or condo without parking save you money? Keeping in mind that most people own their homes or condos for 3-7 years; paying monthly for a parking spot is going to cost you far less than the actual cost of buying a parking space or the price differential between homes with or without parking. While it’s true that having a dedicated parking spot or two can add re-sale value and that having a house without parking can limit the people who will even come to see your house, it’s going to cost you more upfront, if not also in the long run.

According to MPAC, a house with a parking spot is valued at about 3% more than a home without one. And a condo will cost between $40K and $100K more with a parking spot, depending on the building and your neighbourhood. If your budget is stretched, are you going to get more use out of additional space or some pavement? In addition to the money for the parking spot in a condo building, your maintenance fees are also going to be higher, as much as $80-100 per month on average.

Street parking is available almost everywhere in the city and it’s only $300/yr, including HST. If you’re considering buying a home without parking, you should check with the city to make sure there isn’t a waiting list for that street. In that case, it’s possible to get a temporary permit for surrounding streets in your neighbourhood.

Many condos are being built with reduced amounts of parking. In fact, some new developments have no parking at all! Reducing the number of parking spots being built increases the cost per spot as the builders still have to dig – and the cost is spread out amongst fewer spots, making them more expensive.

The reality is that buying a property without a parking spot is less expensive in the long run and you can end up with extra money in your pocket when all is said and done. If you don’t own a car, it’s an easy decision. If you do own a car, you have to figure out your priorities and whether the convenience is worth it to you.

The main exception is if you’re buying a condo as an investment – condos with parking command higher rents and if the tenant doesn’t want the spot, you can rent it out for $100-$200 per month, maybe even more.

If you have any questions about the pros and cons about parking spots, please get in touch!


Market Surge: Listings Soar 47%

According to the most recent sales statistics from May, the listings to date for this year have been coming fast and furious. Considering the amount of choice available, there really isn’t a better time to be a buyer, if you’ve got the funding. There were 47% more listings available this April 2024 than there were last April and and in May that number was up another 21% year over year. Add to the mix that The Bank of Canada began decreasing the prime rate by ¼ point and that there are fewer buyers out there looking, it’s an excellent time to jump into the market.

Chances are, when the Bank of Canada lowers interest rates further as they are predicting, there is going to be a crush of buyers out there, and prices are only going to go higher.

Where are the buyers right now? I think it’s a bit of a mob mentality; people think ‘if nobody else is buying, why should I?’. The same thing happens sometimes with properties. A house can languish on the market for weeks without an offer, leaving buyers wondering what’s wrong with the house. But then someone makes an offer and all of a sudden, a second offer comes along.

Now that the numbers have come in for May, it’s no surprise that numbers were even more dramatic than they were in April – more listings and fewer buyers. The good news for sellers is that prices have remained fairly steady.

Sellers these days need to be a little patient. According to TRREB, the average number of days a property is on the market (YTD) is 24, which is high when you realize that it used to be under two weeks. However, the real number sellers should be aware of is Property Days on Market (PDOM), which is 35. What’s the difference? Realtors will often re-list a property at a different price so that it seems new and fresh, but the PDOM is a more accurate representation of how many days the property has been on the market.

That said, not everything is actually selling. In C08, only 20% of the listings were selling, which seems pretty low. There are more houses selling compared to condos, but it’s still quite low.

My advice: If you need the funds from a sale of a property to close on a new property (and most people do!) right now, you should absolutely be selling first. Because there’s so much inventory, if you sell your place and give yourself a 60-90 day closing, you should be able to find something you love within that period of time.

Where are prices headed? Not surprisingly, when the market stats were published at the beginning of June, there is a slight decline in the prices of most housing types, including condos. There’s still some downward pressure from increasing inventory and decreased buyer activity. A lot of new listings are one bedroom condos, and investors are concerned that the rent they’ll be getting will not be enough, or a mortgage renegotiation won’t be affordable. With the increase in available properties for sale and some seller’s timelines, there is definitely opportunity to negotiate a very attractive sale price.

My latest is an unusual home on St. Clarens. There’s an interesting story related to this home. I actually helped the seller buy the empty lot in 2014. Although the zoning only allowed for a width of eight feet, this was perfect, because his plan was to build a home with shipping containers, which are exactly eight feet wide! You can have a look here.


June 2024 Newsletter - Best Gelato in TO - 2 Great Listings- Luminato in the Square - 7 Most Iconic Buildings That Were Never Built

Don’t let the season’s longer days go to waste, make the most out of the weather and head out on some local adventures. June is Pride Month, and the best resource for what’s happening is the Pride Toronto website.

The Toronto Real Estate Board has released the numbers for May. We are seeing the same trends we’ve seen over the past few months; more listings on the market than this time last year, and fewer sales. Prices are down slightly compared to last year, with the exception of townhouses. There are definitely opportunities for buyers, especially for those who need more space!

As predicted, the Bank of Canada has reduced the key interest rate by .25%. I don't think this will have an immediate impact on the market, but it should give confidence to buyers that interest rates have peaked and are on the way back down, though we won't see the rates go as low as they were in 2020 and 2021.

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