“It is becoming difficult to finance small condos, less than 600 square feet,” says Freedom Malhotra, a sales representative at Condo Planet, “because there are not enough comparable solds for appraisers to justify the prices builders are selling them for.”
In fact, according to Malhotra, many condos are not even being appraised at the value investors purchased them for.
He also advises investors to avoid buying the best condo on offer. For example, he recently had a client who wanted to sell his corner condo unit in Mississauga. Malhotra adds: “He made the mistake of buying the best unit available.
“It has appreciated to a price point where few buyers exist in the market. That is why you have to consider your exit strategy so that you can be confident enough buyers will exist when you decide to sell.”
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Size increasingly does matter for investors buying condo units as that segment rebounds and market prices rise above what banks are prepared to lend.