Almost 40% of GTA homebuyers don’t end up getting a place in their desired neighbourhood. Luckily, the GTA has a lot of great places to live. Many of them don’t have the cachet of a Riverdale or a Roncesvalles, but they have their own under-the-radar charm that’s just waiting to be discovered. Homes in these neighbourhoods tend to be priced lower than in the really in-demand ones – and there’s less competition from other buyers. Buying in one of these areas is an excellent opportunity to get into a home at a decent price, and watch it appreciate as things get more popular (and more expensive).
So how do you figure out where those up-and-coming areas actually are? Here are 9 things you should look for to find relatively affordable, liveable communities that are poised for great things.
1. It’s near a neighbourhood that’s already popular.
Hot neighbourhoods are expensive. As demand pushes prices higher, there’s a trickle-down effect in the bordering areas. Buyers who can’t afford property within an area’s official boundaries buy in adjacent neighbourhoods with lower prices.
So if you love Roncesvalles, for example, looking in nearby areas like Wallace Emerson or Brockton Village could get you a lower price for a similar property. Or if you’re eyeing pricey South Cooksville in Mississauga, North Cooksville could be your entry point into the area.
2. It’s construction central.
If lots of older homes are being fixed up and new ones are being built, it may mean a run-down area is finding its footing. As property values rise around them, homeowners are more motivated to upgrade things like roofs and make major repairs. They know that if they sell, they’ll get their money back. Lots of new construction projects on the books? That’s also a good sign the area’s heating up.
3. It has easy access to a big city.
Life in the city is fun and exciting, but being close to the action can come with a hefty price tag. As buyers are priced out of central areas, and transit options like GO offer direct connections to areas further out, those communities grow in popularity as well.
4. Data is showing an upward trend.
Take a look at the neighbourhood sales and rental data (here’s how). If prices have been going up over time, that’s a good thing. And if appreciation is higher than the city-wide average, that’s good, too. Also look at how quickly properties sell once they’ve been listed. If they’re getting snapped up quickly, that means the area is gaining popularity. If they sit on the market for months, however, that’s a different story.
5. It’s popular with a younger demographic.
If the area has lots of young renters and buyers, that’s another indication it’s on an upward trajectory. Younger buyers and renters generally gravitate to more affordable neighbourhoods. As young families and professionals move into the area, businesses follow, building a growing presence of dining, shopping and recreation options that fuel the local “cool factor,” boost demand – and increase property values.
6. There are lots of creative types living there.
Artists and makers typically look for affordable places to live and work, and often live in less desirable, ungentrified locations. Their presence transforms those areas into interesting, vibrant communities where people want to live. (Think back to Hamilton 15 years ago versus now.) Ironically, it is their presence that makes their area more attractive to the buyers who drive up prices…artists ultimately have to go looking for cheap housing in new locations.
Photo caption: yelp.com
7. Businesses are moving in.
When cool eateries and interesting retailers start setting up shop, that’s a hallmark of progress towards a livable, dynamic neighbourhood. And when big brands follow suit, take note.
Retailers like Starbucks and other high-end food chains have studied the data and know which untapped neighbourhoods are next in line for growth. And if they’re putting major cash into opening a location, that isn’t being done on a whim. Plus, when big brands open up, it can give smaller, more independent businesses the confidence to do the same.
8. The government is making infrastructure investments.
Look in areas planning new transit lines, bike paths, community centres, parks, public spaces and other amenities. It may take a while before the infrastructure is ready to use, but that area is going to change, guaranteed. Buying there is generally a great investment, whether you plan to live there yourself or rent it to someone else.
When the government is investing in upgrades to the area, housing developers, businesses and buyers won’t be far behind. Want to know what parts of the city have something in the works? Ask the folks at your municipal permit office what parts of the city are seeing the most action.
9. Real estate agents are excited about the area.
If agents are buzzing about a neighbourhood – or better yet, they’re buying investment properties there themselves – pay attention. No one else is as knowledgeable as the pros who have their ears to the ground every day. Your agent is your very best resource for identifying properties with the greatest potential value. Look to them to suggest alternatives to the neighbourhoods you love.
It isn’t easy finding the next hot neighbourhood. You need to do your research, really think about timing – and be prepared to live somewhere that may not be 100% awesome just yet. The rewards for getting in early are pretty stellar: you pay a lower price for a great area, your equity builds faster – and you get the satisfaction of knowing everyone who moves in after you is paying more.