Buying a condo in Toronto can be an excellent investment. Home prices in Toronto are up significantly in the past year, so it is necessary to look at the market carefully and decide on your options. Many people may feel that they have been priced out of the condo market in Toronto. Still, they should be patient and understand that there are good deals on the horizon depending on the neighbourhood and amenities they are considering.
Living in a condo can be a great alternative to a detached home. When you live in a condo, you will not be responsible for the time and expense associated with snow removal, lawn care, or trash removal. A condo can also be an excellent investment property.
Michelle Kam, a Toronto realtor, explains what you should look for when buying a condo and the various factors that should go into your decision.
The Condo Market
Unlike the market for detached homes, the condo market has declined since the beginning of the COVID-19 pandemic. People were looking for larger homes with less possibility of being exposed to neighbours’ illnesses. The short-term rental industry was also severely restricted by the City of Toronto, flooding the market with fully-equipped condos that Airbnb and other short-term rental sites had previously used.
For now, this adds up to a buyer’s market. Since stocks are high and prices are low, this is a great time to consider buying a condo in Toronto. As the pandemic eases somewhat, people are beginning to look differently at living in condos. This is already causing condo prices to rise, and more often than not multiple offers are now being made on the same properties. This means in 2021 the condo market should continue to see a rise in costs, causing prices to spike as they have in the detached housing sector.
Certain parts of Toronto are more desirable than others. This is a simple fact of living in a large urban area. Condo prices vary a great deal by neighbourhood. The adage “buy the worst home you can find in the best neighbourhood you can afford” does not apply to the condo market as such. Most condo buyers do not want to spend a significant amount of time or money on home renovations. They are looking for convenience above all, and they want to save their money in the long term for a detached home or another large purchase.
Some of the most desirable neighbourhoods for condo buyers in Toronto include East York, Danforth Village, West Hill, Centennial Scarborough, and Malvern. Homes in these neighbourhoods combine attractive condo purchase and lease prices with safe and friendly surroundings.
While many condos are sold to singles or childless couples, there is an increasing number of condos with more bedrooms appropriate for families with children. Families who already have children or couples planning to do so should look into the school district and see what amenities are available for students.
The Toronto District School Board provides an informational database called the Fraser Institute School Rankings. This database includes test score averages, student-teacher ratios, and other pertinent statistics that can help you compare schools within the Metro Toronto area. As a word of caution, the school district does not provide numbered rankings.
Condos do appreciate in value over time, but not as quickly as detached homes. Much depends on the amenities of the building, the neighbourhood, and the maintenance of the property. Single-family home prices have grown at shocking rates in the Toronto market, so the condo market may seem slow by comparison.
Your Housing Budget
You need to choose a home you can afford, first and foremost. You will most likely be required to put in a down payment when you get a mortgage. This down payment can vary depending on the type of loan you choose. You will need to carefully consider your monthly costs, including your mortgage, condo fees, insurance, and any other expenses you may incur.
Generally, a two-bedroom condo costs about $730,000 in Toronto. A one-bedroom condo comes in at about $470,000. This is much less than the cost of a detached home, which can average as high as $1,500,000.
Choosing a condo may depend on choosing a neighbourhood that you want. The larger, high-rise condos located in urban parts of Toronto are convenient for downtown jobs, but the increased traffic may lead to headaches for people who work in the suburbs. Also, inner-city neighbourhoods may not have optimal schools for families. Check on all of the neighbourhood’s features, including noise, crime, available amenities, and whether surrounding buildings are vacant or in poor repair. These factors can drive down your home’s worth and make it more difficult to resell when the time comes to buy another.
Understanding the Condo Market
Michelle Kam wants her clients to know the condo market in detail before committing to purchase. Understanding the overall market trends, the neighbourhoods, school districts, resale value, and local amenities can help you decide whether a condo is right. Above all, keep in mind that a condo can be an excellent investment that can help you find an affordable place to live while keeping you within reach of Toronto’s cultural activities.