While it’s true the housing market has been slower this spring compared to years past, Toronto’s condo sector is thriving.
“Prices have moderated to some extent and the condo markets are actually going up,” said Liz Smith, a REMAX Hallmark Realty sales rep. “They’re flying off the shelf. The same units last year were selling for 500,000; this year they’re as high as 565,000.”
However, Smith believes better deals could be found on the city’s outskirts.
“I think that right now there are better investments in condos in areas other than downtown Toronto,” she continued. “Pickering has some really good condo investment opportunities. There are some buildings that will be close to the new casino and are a 15-minute walk to the Go Train. Parking is also included in most of the price points out there.”
Sotheby’s International Realty Canada’s president and CEO Brad Henderson says the market appears slower than it really is because this year’s activity is usually juxtaposed with last year’s record highs. Moreover, condos are sought after by four major cohorts: first-time purchasers, downsizers, ‘step-up’ buyers, and investors.
“Even more buyers are looking at condos as an alternative to the suburbs and a long commute to work,” said Henderson. “For investors, condos are a pretty small bite to be able to invest in real estate in Toronto. The vacancy rate for apartments, whether condos or purpose-built rentals, is sub-1%. You add all those factors together and we cannot see that condos are not going to be a good investment for people, as either a place where they live or a place where they invest.”
But condo carrying costs have gone up and the vacancy rate, coupled with rent control, means fewer people are giving up their rentals.
“People have come to recognize that capital appreciation is the biggest part of their return, and their thinking is that they’ll fund a negative cash flow on their investment because they believe their return will still be favourable,” said Henderson. “I think that where you’re going to find condominiums continue to be strong; they’re favoured by first-time buyers, and more and more people want to live close to where they work.”
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