Residents of Toronto were hoping that the prices would get reduced by a considerable margin so everyone would be able to buy a home. However, these dreams and aspirations were dashed by the implementation of new taxes and the mortgage stress test.
They have been dented even further when the Toronto Regional Real Estate Board (TRREB) revealed they predicted a double-digit rise in sales and prices of homes for the current year. Meaning, the average resale price of the home got a rise of 10% from C$ 819,319 to C$900,000.
Last year, the average price of a home in Toronto grew by 12 percent. This was more than that of 2018 and the TRREB officials are worried about the coming days. Not only are buyers facing competition for a reduced number of listings but also the rising prices may not make buying a home a simple process.
What should you buy in the current scenario: a house or a condo?
In the past decade, Toronto has witnessed a boom in its real estate. In many different areas of the city, new residential properties were made. It did become difficult to decide what to buy and where to.
However, the recent sharp rise in prices made buying a home next to impossible. Also, there has been a shortfall in supply of homes, both Toronto condos and houses are in short supply.
Last year, Condos stood as the number one investment option in Toronto’s real estate. They availed an increase of about 9.7 rates in the average per-unit price. Whereas, the rate of houses being made slowed down. Though most Torontonians prefer owning a house with a wholesome authority, there has been a rise in the sale of detached and semi-detached houses.
Residents are facing a tough situation as potential investors. They are confused about whether to purchase a home or a condo. There was a decrease in the price of homes and arise in the prices of condos last year. This year, both homes and condos have become expensive.
With Canada being an individualist society overall, the younger generation is going for condos as they believe it will be a better investment in comparison to homes. The cost of condos will appreciate due to their inner-city location.
A deep yet concise comparison of a home and a condo
There has been an increase in the sale of condos and condo townhouses. Sale of homes has also recorded a rise, but condos are running hot due to price rises. Hence, let us now have a look at a brief comparison of home and condo in real estate terms:
Costs of insurance
Before people purchase an asset like a home, they need to check the cost of insurance as homes need insurance (whether a condo or a house). Insurance is generally insurance which all homeowners must bear. At one point in time, they will either reduce it or get rid of it.
A house requires more money for insurance as it includes every nook and corner of it as well as every associated component. Condos have a lot of amenities belonging to the condo corporation hence condo unit owners only need to ensure the inner space they own. This helps them bring down insurance costs.
Costs of maintenance
Maintenance costs include services of cleaning, checking, plumber costs, repairs, servicing and other associated costs of services involved.
When it comes to condos, residents normally pay a certain amount of money as condo fees. This is enough for all the major & minor costs, and residents are relieved of the cumbersome responsibility of housekeeping.
But for homes, the scenario is different. The homeowner shoulders all the responsibility and maintenance expenses are thus costly.
The expenses of necessities
In homes, charges for utilities and the charges incurred for the garbage disposal service can be high as they are charged individually for each home. For condos, it is a partially shared cost because it comes under the condo’s list of charges.
In terms of electricity and heating bills, the house’s owner is responsible for incurring them. In condos, this comes under the fees paid by residents. Residents at times also share the load of their neighbors.
The same goes for both in terms of other unexpected and necessary expenditures.
In houses, unexpected costs can come but not as frequently as that of condos. Even when condos are renovated, a few existing and unresolved issues remain. Houses can be renovated the way their owners want them. Condos are a bit restricted in this regard.
The cost of renovating
Renovations are costly. When it comes to renovating a house, it catches more attention because house owners spend more time and money in renovating it, due to a personal element of being individual. Hence, those who own a house tend to spend more on a renovation.
In condos, when it comes to renovation; the condo corporation must first give the owner permission for renovation. They also check if the renovation activities will not cause the residents any issues. This is why renovating a condo can be cumbersome.
Whether a person owns a condo or a home, they must bear the costs of renovation.
The convenience of residents and location
Toronto is unique in North America due to its proper placement of infrastructure, greenery, and roads. Its urban planning is among the best in the continent for large cities. Residents of any city in the world place convenience of certain things as a top priority, hence when they look for a home, they often check if the market, school, work, daycare, bus stop, taxi stand, subway or any entertainment venue are nearby.
Most of the condominiums in Toronto are in and around the inner-city areas; such as Downtown, Etobicoke, Chinatown, the entertainment district, City Place, Scarborough and the like. They are often located near parks and from condos, residents can easily commute to any place they can.
Most condos in Toronto are self-sufficient as they have an indoor supermarket, general stores, gym, secure parking, backup generators, and many more in essential amenities.
Homes at prime locations cost a fortune. They are often located on the inside roads instead of the main roads. However, housing complexes such as apartments, lofts, condo townhouses and condominiums are constructed near parks, schools and other key structures for an easy commute.
The locations of both condos and homes are of paramount importance to investors. No one can have all the convenient locations and other conveniences at their doorstep. Hence, a proper decision is needed when it comes to buying either a condo or a house.
The homeowner’s lifestyle
The homeowner’s lifestyle also comes into consideration when making a purchase of either a condo or a home.
Condos are packed with sports halls, pools, gym, gaming areas, bowling alleys, screening areas, community centers, parking and the like. Charges of using these amenities come under the condo’s fees. Since all residents and tenants of the condo complex get to use them, there is no element of individuality in it.
Yet, residents can make full use of these features. They are worth the money being spent on.
For those who seek individuality in amenities, they can buy a house having its own swimming pool. They can also equip the basement as a mini studio, gym, workshop or anything they like.
Elasticity of ownership
A house comes with full ownership. Their owners do not face many issues of condo corporations and the like as they own complete rights of the plot the house is built upon. It also does not cause much of a nuisance to the neighbors.
Condos have their rules as residents cannot play loud music, must follow strict parking rules and must use utilities carefully. They also must incur any unexpected costs due to misuse of such.
The parking, gym and other amenities of the condo fall under the condo corporation’s common property. No one can customize it as per their wish, but residents must participate in cleanliness and maintenance of such.
It is different for houses as their owners have their liberty in renovating each area of the house, customizing it, renovating, painting or mowing the lawn, and the like. Yet, owning either of both requires responsibility from the owner.
Both a house and a condo have their perks, privileges, disadvantages, and cons. It all depends on the buyer’s choice of what they wish to purchase. Whatever they purchase must be maintained by them properly.
Given Toronto’s current real estate situation, buying a condo is a sound choice as not only are their values rising each year but also pose as secure investment collateral which can be sold for a handsome amount. It thus gives investors a good source of income.