Toronto might be one of the most livable cities in Canada, but it’s also one of its most expensive. Homes here are quite costly, and if you’re planning to buy a house here, you must be ready to drop a substantial amount. This might make you wonder if investing in a house in Toronto is the right move. So, is it worth buying a condo in Toronto?
Toronto’s real estate market is quite expensive, making condos an affordable option. Its average price is around $800,000. For these and other reasons such as lower maintenance costs and higher demand, it’s worth buying one. But you should consider location, flexibility, and uniqueness when buying.
However, if your decision to own a condo is for investment purposes, you should be ready to hold it for a certain period before selling. During this period, you can rent it out. This article discusses whether owning a condo in Toronto is worth it.
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Average Price of a Condo in Toronto
The average cost of a condo in Toronto as of February 2022 is $800,000. This is a 25% increase compared to the cost last year. While that might seem expensive, you have to consider that other types of homes are even more expensive, making condos the next best thing after rent. For example, the price of a detached home is $1.8 million, semi-detached homes cost $1.36 million, and a townhouse costs $1.25 million. Thus, a condo is the most affordable choice for you in Toronto, which has replaced Vancouver as the most expensive real estate market in the country.
Why Get a Condo in Toronto?
When thinking of buying a home, you usually have many options to choose from in terms of type. The condominium is one of the best options you can choose in Toronto whether you’re buying to live in or as an investment. There are several reasons to buy a condo in Toronto, such as:
1. Inexpensive Option
In the ultra-expensive real estate market of Toronto, condos are the cheapest options for becoming a house owner. With the average cost of homes in the city nearing a million, you can still find condos worth around 700 – 800k. On the other hand, fully or semi-detached houses are now over a million regardless of where you’re looking for them in the city. So, many buyers are falling back on the condo as the next best option.
While it may not have the space a house will provide, it offers more than sufficient accommodation that you’ll learn to appreciate in a place like Toronto. Compared to other home types, the low cost of condos also means if you’re planning to buy something you can sell for profit later or even rent it out, condos are the best options you have. For those planning to own a condo for investment, it’s best to buy a pre-construction condo as these are usually cheaper.
2. Demand for Housing
The demand for condos has increased significantly due to people moving into Canada annually. The immigration rate in Canada is high, and most of those that move to Canada usually opt for Toronto. With the high rate of migration to Toronto, condos have become the best home choice for newcomers to Canada. This is especially true in Toronto, where developers build fewer detached houses due to the high population density. The limited space here makes it better for developers to build condos, and the city could still use more. Thus, buying a condo means you have something that’s in high demand. Even if you decide to move out, you can easily sell or rent it out later.
3. Maintenance
Another benefit of owning a condo is that it requires minimum maintenance from you. With proper management of the condo property, you can be sure of a good resale value without having to do anything but keep your own home in good shape. You can talk if a condo is well managed based on the environment and facilities. Of course, you’ll be paying maintenance fees, but it’s usually less stressful and costly than what you’ll spend maintaining a house.
Timeframe For Owning a Condo
If you’re planning to invest in a condo in Toronto, you must be ready to hold it for the long term. This means at least five to 10 years before you sell it, as this is the best way to get the best returns on it. Owning it for a lesser period only amounts to speculation, and while you may make some profit off it, it might be a gamble for you too. With real estate, there’s never a need to rush. You can hold as long as possible, and in most cases, the longer you hold, the higher your chances of profits when you finally decide to sell. Of course, some expenses come with buying and holding a house too. But the rising home prices in the country will likely offset all these costs.
What To Consider When Buying a Condo in Toronto
Are you thinking of buying a condo in Toronto, you should consider the following:
1. Location
Buy a condo in areas where people want to live rather than where they have to live. This might mean spending a few extra bucks. But a desirable location makes all the difference when you’re trying to sell your property later on. So, get your condo in areas with restaurants, cafes, great businesses and where the TTC is accessible. Buying in a good location means that you don’t have to wait for so long before finding your property’s ideal location.
2. Uniqueness
Also, look to buy unique condos as these usually have higher resale value than the regular basic condos. For example, the best condos you can get in Toronto are the Redbrick lofts. However, unique condos in high-end neighbourhoods may cost you more than you’re willing to part with. So, it doesn’t hurt if you enter the market with more generic choices.
3. Flexibility
With condos, you need to consider the flexibility of the homeowners’ association or the lender. Some lenders and condo associations require that buyers live in the property. In these cases, you can’t buy such condos for investment. So, you’ll need to check to ensure that the condo association or mortgage lender has flexible terms on how you use your property before you go ahead to buy it.
In Conclusion
If you’re looking to invest in a property in Toronto, condos are your best choice. For those who want to own a place where they live, there are a lot of factors to consider. But unless you’re earning above $200k annually, a condo is likely the most advisable choice for you. But, of course, there are several things to consider.