5 Resolutions for Buying a Toronto Loft in 2015

5 Resolutions for Buying a Toronto Loft in 2015

Author: Carl Langschmidt

Dec 30th 14

The Tip Top lofts pictured here increased a dramatic 18.5% in 2014 over the previous year.

As we approach the New Year, it’s a good time for prospectivebuyers of Toronto lofts to make some real estate resolutions. Lofts for sale in Toronto continue to be low in stock in comparison to demand and frankly, they just aren’t making many more as it’s cheaper and more profitable to construct a new build condo or soft loft than to convert an historic building.

As such, it’s important to arm yourself with the facts upfront so that you can make a swift and suitable purchasing decision. Here are our top loft resolutions to ensure your buying process is merry and bright.

#1: I Will Not be Paralyzed into Inaction by Naysayers

Because it’s only going to get harder to get a foot on the property ladder if you wait. The fact is that the average prices of Toronto lofts for sale are increasing higher and faster than buyers’ annual earnings. And the market for lofts in Toronto is showing no signs of slowing down.

But as a buyer, you may have concerns about the market. Understandably so. We’ve all heard a lot of mixed messages in the media about the sustainability of property values in Toronto and a potential condo bust. You can read our thoughts on the 2015 condo market on our sister site.

The fact is, we’re more confident than ever in the health of the Toronto loft market. See for yourself why. Review the stats of your favourite loft buildings by comparing building trends on This is the only website in Ontario to provide buyers with this breadth and depth of value analysis on Toronto condos and lofts. Check if the loft you’re interested in is appreciating higher than average and educate yourself on all of your Toronto loft building options on MrLOFT.

#2: I Will Do the Math and Stay Objective. I Won’t Get Dazzled by Design.

Even older Toronto lofts in popular neighbourhoods are seeing dramatic year-over-year value increases. The Sorauren Lofts pictured here increased by 19.6% in 2013.

Our biggest cautionary advice for buyers of Toronto lofts? Watch your square footage prices and maintenance fees. Don’t just flock to the shiny new thing. This is particularly true for new build soft lofts as preconstruction condos are often overpriced. And so even though most authentic hard lofts have a higher price tag than nearby condos or soft lofts, they may end up being better value for what you’re getting. But it’s not a black and white issue.

This is where values and trends analysis on Toronto lofts is key. Review the building data in comparison to local comp’s and make sure that you’re not overpaying. And work with your agent so that you know what fair market value is for the specific unit, building, amenities, neighbourhood and market conditions in question. Remember to factor in your own real estate goals and the anticipated number of years before you plan to sell.

#3: I Will Budget Wisely

The Toronto Star recently reported that the real danger to the Toronto real estate market isn’t an oversupply of condominiums, the juggernaut trend that is the ever-increasing price of houses or even cheap credit and low mortgage rates. The danger is in “constrained liquidity”.

The real concern, in other words, is when homeowners put everything they have (and don’t have) into their real estate asset(s) with no cushion leftover for changes in their monthly expenses, loss of a job or any other circumstance that could negatively impact finances.

It’s easy to blame the market and cheap credit when this happens but it’s down to undisciplined buying tactics and rose-coloured glasses. It really comes down to debt to income ratio and keeping yours within a reasonable range.

All of that said, there’s more good news than bad. We Canadians are paying down our mortgages faster and there are few households in danger of default. So while we think all of the fuss in the media is unwarranted, it does serve as a good reminder to budget wisely for your loft purchase.

There are many online calculators to help with this. The Canada Mortgage and Household Corporation advises homeowners not to exceed a 32% debt to gross income ratio (this includes your mortgage as well as maintenance fees, bills and property tax against your gross monthly income). The CMCH and banks are tightening lending restrictions, although rates are predicted to stay low, and so chance are you won’t get funded above a sensible level anyway.

#4: I Will Look Into Switching or Renewing My Mortgage While Rates Are Low

While it may be harder to qualify for your mortgage, we’re seeing many rates now at near-record lows. If you’re unhappy with your current mortgage terms or rate, it’s likely worth the penalty fees to break your mortgage early and get in on a lower fixed-rate while you can.

And we can’t stress enough that if you’re renewing your mortgage, you really need to shop around. Don’t assume your existing lender will give you a preferred rate, let alone their best rate. James Harrison from tells us that:

“Most banks have a renewal retention rate somewhere in the 80% to 95% range and the vast majority of renewal clients accept the rate they’re offered. This is often 1% or higher than what they could get on the open market with a broker.

This can mean an extra $10,000 to $50,000 in interest depending on the size of the mortgage. It’s scary how much banks make off of their most loyal customers and how these customers are in effect being penalized for that loyalty.”

You can read more about playing hardball on your Toronto mortgage renewal on our blog.

#5: I Will Buy for the Future as Much as My Budget Permits

The Broadview Lofts have increased in value by 12.3% in 2014 over 2013 and the size of the building means that there are lots of floor plan options. Choose one that has some room for growth if you can swing it.

As stated above, you need to be clear about your maximum budget and watch your monthly expenses. However, most buyers look within a price range that has at least a $50,000 leniency in either direction.

When it comes to buying a loft in Toronto, our advice is to stretch to the max of your budget providing you stay within the debt to income ratio outlined above. The reason for this is that all too often we see clients selling as quickly as twelve or eighteen months after purchase because the space isn’t large enough for them.

Although lofts for sale in Toronto demand a premium price and that trend is unlikely to reverse, it’s difficult for sellers to break even let alone generate a profit when selling too quickly. You have to factor in fees, land transfer tax, closing and moving costs. As such, it’s wise, within the limits of pragmatism of course, to buy as much square footage space as you can comfortably afford in a neighbourhood that you can see yourself growing into.

Buying a Toronto Loft in 2015

When comparing lofts for sale in Toronto this year, spend the time to really understand the numbers. Look at current property values and historical trends for the loft building that you’re considering, compare mortgage rates and figure out what you can comfortably afford to carry. There’s no point in buying a swank loft if you’re too stressed by debt to enjoy it. On the flipside, ensure that you’re buying something that will keep you happy for the next two to three years at a minimum.

For buyers that make informed purchasing decisions, Toronto lofts will continue to be excellent investments in 2015 as well as great, unique spaces to call home.

Guest Contributor

James Harrison, President of, is an award-winning mortgage professional and one of the top mortgage brokers in Canada. His VIP status with all major Canadian lenders means that he’s able to leverage the best terms and rates for his customers. You can learn more at or download the App for daily rate specials.