Is Condo Market In Canada Still Strong?
June 22, 2010 – 7:27 am
Is the condominium market in Canada still strong?
Yes, for at least the last five years, Canadian condominium buyers have generated robust growth in the market, and experts predict the market will remain strong.
Especially in Vancouver and Toronto, demand for condominiums as investment properties has driven-up prices and sustained a sellers’ market. Not surprisingly, the Olympics set-off a boom in British Columbia real estate, showing the world both the landscape’s beauty and the people’s congeniality. Values of resort properties have soared, increasing the value of all B.C. properties.
In the Toronto area, the overheated market will cool during the summer of 2010, because developers will make thousands of units available for pre-sale. For the first time in years, the supply of Toronto condominiums almost will reach equilibrium with demand, stabilizing prices and giving buyers more purchasing power. Experts predict that investors and speculators will grab more than one-third of the new condos for use as rentals, counting on their rapid, sustained appreciation. Meanwhile, demand for condominiums in Canada’s other major cities continues to increase as the cost of commuting from the suburbs rises and the advantages of urban living grow more apparent.
Pointing out that recession generally has kept housing costs low, and stressing that interest rates remain very close to record lows, realtors suggest that well-qualified buyers never will have greater opportunities to find exceptional values in condominiums.
Good starters for young families
Young couples starting families continue discovering that a condominium makes a perfect starter home, because it allows privacy, space, and comfort, and it represents one of the best ways to save for a down-payment on a single-family home. Many affordable condominiums have nearly as much square footage as a bungalow, cottage, or two-bedroom home in a development. Just as importantly, many reasonably-priced condominiums include upgraded kitchens with “energy star” appliances and granite counter-tops—amenities generally unavailable smaller, older homes. They also feature hardwood flooring, fireplaces, and lofts. For many young buyers, sharing one wall with the adjoining condominium seems a very small price to pay in exchange for the whole list of deluxe amenities.
Perfect for downsizing the empty nest
When the last child moves away from home, the old family homestead seems incredibly big and frighteningly empty. The rooms that once were so full of noise and life suddenly seem desolate, as if one might hear only the sound of cold wind and crickets chirping. While the children remained at home, mom could coerce, entice, or bribe them into helping with housework; now, she shoulders the entire burden alone. After a while, the advantages of down-sizing become clearer and clearer. At least one-quarter of all Canadian condominium sales go to couples in their fifties whose children and have grown and whose homes have appreciated dramatically in value. Many of them discover that they can sell their homes, purchase comfortable condominiums, and have money left over for investment in annuities or mutual funds. One satisfied condominium buyer commented, “The real advantage comes in the fact that the children can visit, but there is not enough room for them to move back home.”
Excellent investment opportunities for young professionals.
Investment in a condominium has special advantages for your physicians and attorneys who continue working long hours as they lay the foundations of their careers, and who need the tax advantages only home ownership affords. The combination of easy maintenance, healthy tax savings, and steady appreciation makes a condominium by far the wisest place to start their investment portfolios. One young Toronto physician points out, “Because I work incredibly long hours, coming home mostly to sleep, shower, and collect the mail, a condominium near the hospital makes perfect sense for me. Later in my career, I will want a home and family, but right now I need a comfortable bed and a sound investment.”
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