With the ever-changing Canada real estate trends and with the different types of properties out there, it is always a question that which is the right property to invest? In this post, we are going to touch the basics of condominium, its latest trends.
Though condominium/condos are colloquially referred to a property, condominium actually means legal ownership of a living unit. Condos are different from other forms of housing in terms of ownership. In a condominium, one owns only the dwelling unit and gets access to common areas such as lift, lobbies, lawns, clubhouse, etc. The land in which the unit is built doesn’t belong to the owner.
The overall repairs and maintenance of the common areas and the individual units will be taken care of by the condominium corporation. The owners get to vote for the condominium corporation, attend meetings, raise concerns and suggest developments.
Condos are mostly ready to move in units with nil maintenance, all the amenities are in one place and even for socializing, one doesn’t need to go out of their comfortable living space. Considering the current generation, millennials, venturing into the housing market, condos seem to be the right choice for them. However, we have to take into account the limitations as well. The condominium comes with the standard set of rules which might not be apt for everyone. The scope for remodeling is very limited. One might not use all the amenities yet end up paying for them. Whenever there is a development in the community, be it an updated security system or addition of a facility like a gym or a clubhouse, the maintenance charges increase accordingly. These limitations can affect the resale of condos as well.
Now that we have understood the basics of condos, let’s see the market trends
According to Toronto Real Estate Board President Michael Collins, the total number of Condominium sales in the second quarter of 2019 is 7,038 which is 3.2% higher compared to the Q2 of 2018.
However, the new listings are decreased by 3.5% (11,110) compared to the Q2 of 2018 (11,512). “As has generally been the case in the region since the implementation of the Ontario Government’s Fair Housing Plan in 2017, the condo market segment has remained tight in comparison to other major housing types. However, from a price point perspective, condo apartments continue to offer prospective buyers a relatively affordable housing option when looking across the GTA,” said Mr. Collins. The average price of a condominium apartment increased by 5.1 percent from $561,343 in Q2 2018 to $589,887 in Q2 2019.
According to a Royal LePage report, every major city’s condo price per square foot has increased. The median price per square foot of a condo is now higher than that of a single-family detached home nationwide. The city of Vancouver remains the most expensive condo market in the country, with homebuyers paying $1,044 per square foot for a condo and $1,279 per square foot for a single-family detached home.
University of Windsor professor Randy Lippert’s book “Condo Conquest,” puts forth another concern. Developers often sell the condos at a lower monthly fee which is realized much later by the buyers. “I think there will be a number of condos where those fees will become unsustainable and people will want to get out, and there’s a point at which it (all) becomes unsustainable,” Lippert said in an interview with HuffPost Canada.
As we said before, the real estate market trends are always changing and it impacts any kind of property. It is the individual’s responsibility to know the basics, analyze the trends and make the right decision.