Jumping to conclusions can hold people back from making good decisions where condominiums are concerned. Recent media reports of condos whose prices skyrocketed before people’s eyes may have scared off potential purchasers. You may worry that if you buy now, your suite will not hold its value. It’s important to remember the Toronto condo market is still driven by affordability — and the reports mention only a handful of projects among the more than 200 for sale now in the city. Those attention-grabbing examples are the exception rather than the rule.
Condominiums remain a great way to enter the housing market, especially in downtown and midtown Toronto, where the average price of a home is $430,000, and of a condo $338,000. That’s a $92,000 difference! Unlike cities such as Vancouver and Calgary, where prices got out of hand across the board, Toronto developers are managing prices well.
The publicized price-jumping scenario involves unusual projects — iconic buildings that are Toronto firsts, or those with world-renowned architects and designers. They have individual followings who will pay the price now and in the future, and many of the sales were to agents representing investors.
Don’t allow these unique circumstances to colour your view of entering the condominium market in Toronto, which is still a wise decision for many purchasers. With more than 200 projects on the market, the atmosphere is competitive, and builders have to put our best foot forward to vie for your business.
Avoid jumping on the extreme bandwagon as well by snapping up several suites to cash in on future price jumps. Remember, you have to be able to carry the costs of the suites you purchase. Of the approximately 15,000 condo sales in Toronto last year, between 3,000 and 5,000 were to investors. This year, we will break the 20,000 mark in sales, with 8,000 to 10,000 to investors. The vacancy rate for suites is lower than 0.5 per cent, but once all the condos are built in a few years, there will be a glut. When owners can’t rent, they will sell, and those suites will still be an affordable option for purchasers. No matter how you slice it, if the condo lifestyle appeals to you, a condo in Toronto is a wise investment.