WHY PEOPLE STILL BUY CONDOS?
In this article, I’ll talk about condo market and give you a few explanations (according to my experiences) on why people still buy condos? And why it is really a wonderful time to invest in Toronto estate condos.
The Condo Market is turning to an only affordable housing market.
Because of tough mortgage rules introduced by the GOVERNMENT OF ONTARIO, buyers cannot manage to pay for buying the same house as they could in 2017 and previous years. This means their power decreased from 7% to 26% from 2017. So, more purchasers will end up challenging for cheaper real estate possibly driving up the prices of condos and townhomes, properties previously considered more affordable.
These changes will push potential buyers to invest more in condos and especially pre-construction condominiums. The increase in mortgage rates which started a few months ago will further diminish buyers’ budget, forcing more buyers to change their mind and investing in condos instead of houses.
According to these factors, we predict an active spring 2018 condo market, particularly in certain areas of GTA and of course, in pre-construction market.
Investing in condo brings more stable money back
While detached homes are still more attractive, it’s tough for landlords to earn a profit on this building type by renting. The buying price is usually too high to be suitable for renting unless you do major changes and renovation to make more than 1 rental space out of that and this comes with its own expenses and nuisances.
In comparison, by buying well capitalized condos, (lower purchase price, higher rental yield) and, where possible, looking for neighbourhoods that backing tenants, such as city centres, universities and hospitals, subway entrances, bus routes, as well as commercial vicinity that gives newly built retail and office space you can guarantee a steady amount of money coming back to you.
Condo has more affordable maintenance fees
Stats show that about 30 percent of Toronto’s rental market in recent years, was for condos, but this rate is not fixed and still growing each year. More renters prefer to live in condos not only due to their limited budget but also for their comfort of living: Condo tenants are not concerned about maintenance, cleaning shared areas, landscaping tasks, snow plowing etc.
Condo owners should pay a fixed maintenance fee to the property manager which is expected to be an expert manager who can fix all problem with lower costs and in less time, meanwhile, house owners sometimes pay double or triple to fix the same problems and of course, they need more time to find a serviceman.
houses usually have more hidden costs than condos. The reason is very pedestrian: when there is a need to fix a utility problem, they call and pay much more than the case a professional property manager pays to painters, plumbers, electricians, etc.
Condo residents and tenants also will have access to many facilities and amenities in modern constructions such as fitness rooms (Gym), party rooms, pool, the guest suite, library, Sauna, etc. which in the case of living houses, you need to pay extra.
House owners may have other problems such as neighbours who do not pay attention to their property. This issue may lead to diminished property value in the whole neighbourhood. I mean, when a buyer comes to buy your house and sees its vicinity is scruffy and untidy, he or she may change his (her) mind. But such issues never happen in condos. All unit owners should obey the more stringent and tougher condo rules, so they cannot refuse maintenance on their own.
I have some new projects coming over the next few months (sorry, I can’t yet confirm sale dates or project details) but I am always looking for your best real estate investment opportunities in Toronto and area.
I have helped hundreds of clients reach their goals and look forward to personally speaking with you to help you develop your investment profile. Simply give me a call on my personal phone number 416-737-7489.