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When people find out that I work in the condominium industry, they often comment that there are too many condos being built in Toronto, that it seems like there’s a crane on every corner, and where’s it all going to end? But I ask them, how does anyone know when we’ve reached “too many condos?”
The phrase should be determined by the law of supply and demand, and right now there’s a fierce demand for condominium suites. According to Urbanation, sales of new condominiums were uncharacteristically high during the third quarter of 2006, which includes the typically slower summer months. In fact, the Toronto CMA experienced the highest third-quarter sales on record, 4,089, which is a full 14.9 per cent higher than last year. The first three quarters of 2006 produced approximately the same number of sales as last year as well, making it likely that we will once again see a total number of condominium sales between 15,000 and 16,000 for the year.
There are numerous reasons why condos are a lifestyle choice for so many people, including freedom from maintenance, plus convenient access to public transit, restaurants, theatre, shopping and more. Immigration is also a driving factor in condominium demand. More than 100,000 immigrants relocate to Toronto every year, and for Europeans and Asians, living in apartments and condominiums is a natural choice.
Another reason is affordability. The average single-detached home in Toronto prices out at $390,000, while the average condo suite is $320,000. For many buyers, that $70,000 difference alone is enough to warrant a condo decision.
The next biggest factor is the avoidance of traffic gridlock and long commutes, which add to an already stressful workday. There are tradeoffs, of course; condominiums tend to be smaller in size than single-detached homes. But a lot of people are now deciding they’d rather live in 700 sq. ft. in the city and forego the commute. And with the high price of gas, they save on commuting costs.
Demographics are also driving condo sales. Empty-nesters represent a major market force, as they desire a lifestyle with less maintenance. But frankly, if this group constituted the only market, there would be too many condos. Fact is, the diverse market includes everyone from first-time buyers to financially independent women who appreciate condominium security, young professionals who want to live close to work, existing condo owners moving up, parents purchasing for their grown children, and investors.
One thing for sure, Toronto has arrived as a city with wide and international appeal. And condominiums will remain in demand for a long time to come.
Linda Mitchell is Vice-President of Marketing, High-Rise for Monarch Corporation. In 2005, Linda was presented with the coveted OHBA SAMMY (Sales and Marketing Member of the Year) award. In 2003, she received the Riley Brethour Award acknowledging outstanding and consistent professional achievement in residential sales and marketing.