So I’m sure you’ve heard by now that our fair city’s real estate market is, and has been for a few years now, at record highs. The driving force behind it? Condos! Over the past few years, condos have been sprouting and blossoming like it was spring all year round. Here’s an overview of the GTA’s condo market — where it’s come from and, more importantly to you, the potential buyer and/or seller, where it’s headed.
When prices began to climb in 2002, it was detached homes that appreciated the quickest, followed closely by semis and, eventually, townhomes. This left many first-time buyers with little to no option. Condos became the flavour of the day because, quite frankly, not everyone starting out is in a position to purchase a $400,000-home. It’s five years later and the trend continues. Home prices have continued to skyrocket and condos have remained the likeliest option for first-time buyers.
By the year 2031, experts believe that an additional 1.5 million people will settle in Toronto. Not the GTA, but specifically Toronto. Most will be new immigrants. Again, condos will continue to be the hottest option because, frankly in many cases, they will be the only option. Add to all this the fact that, comparatively, Toronto’s real-estate prices continue to be far below those of like cities such as New York, Los Angeles and Vancouver, and it’s easy to see why condo prices in this city are, for the most part, safe.
Does this mean that buying a condo is a no-brainer and you can’t possible go wrong in doing so? Absolutely not. Going wrong is as easy as using the wrong realtor or purchasing in the wrong building at the wrong time — for example, a building with a low reserve fund. You can go wrong if your plan is to move within 18 months, just when the building across the street is set to block your currently stunning view of the lake, or if you miscalculate the potential rent you think you’ll have coming to you while you rent and wait for your condo to appreciate. Make no mistake, your due diligence is required, despite the health of the market.
Real estate is most often the single largest purchase a person/family will make. It’s one thing to understand why the market is strong and why it will continue to remain strong. It’s another thing to understand how to take advantage of it. Consider that even over the last three to four years, certain areas of the GTA have actually depreciated. Consider that you may purchase in a given downtown condo and stand to make half, or double, what you would if you purchased in the building down the street. Consider that the majority of buyers spend more time deciding and researching their next car or vacation, rather than their next home.
The bottom line? The market is ready for you, it’s up to you to make the right move.