What You Need To Know About Buying A Condo In Canada
Unless you’ve been living under a rock, you’ve probably noticed that the condo projects in Toronto has skyrocketed in the past few years. Rounding out 2017, rental investors accounted for 48 per cent of new condo closings – this makes sense as the average resale price of a condo rose by 26% and rent by 9%. If those numbers don’t speak for themselves, a Toronto real estate broker told CBC News that “All the condos being built — a lot of them under construction at the moment — are still not keeping up with demand.”
Advantages of Buying a Condo Over a House
There are many reasons people choose to buy condos beside investments. A big one is maintenance; homeowners are tasked with things such as cutting the grass, shovelling snow, or general maintenance tasks like making sure the roof doesn’t leak. Instead of having to bear the burden of these issues alone, condo owners pay fees that cover these tasks. Though these fees may be volatile for older units that need a lot of upkeep or work redone, the benefit of buying a pre-construction unit includes knowing that everything in your unit will be brand new upon move-in and would not require maintenance immediately.
Another reason to go the condo route would be amenities. There are communal spaces such as indoor gyms, pools, or working rooms that a condo could offer. Some condos even have theatre rooms or party rooms that can be rented out with a fee and/or deposit to provide a safe space to host events.
Beyond that, there’s the added security factor. Condos involve key fobs to enter and often have around the clock concierges to monitor the premises, accept parcels, or answer questions. These are all just part of the reason why a condo could be beneficial, especially to those who live a busy lifestyle and don’t have time for regular upkeep or things such as receiving packages.
What’s the Cost?
Global News notes how in Toronto, one of Canada’s two most expensive markets, are seeing buyers pushed toward condos because of stricter mortgage rules. Condo prices are up 14% in the year following March 2017 and rising. The Financial Post affirms this with the numbers, claiming “Amid low supply and soaring demand, the average price of a resale condo in the city hit $558,000 in the first quarter of 2018.” Based on these numbers, potential buyers in the resale condo market would be looking at a minimum income of $100,000 a year “ to satisfy the lending standards for gross debt service ratios as well as tougher mortgage qualification rules introduced by federal regulators in January.”
The rising prices of resale condos highlight the benefit of buying a pre-construction condo as a more affordable option. As prices creep steadily upward, it’s comforting to know that as construction takes place, the property rises in value.