In 2012 the sales in “Toronto condo market” looked like this: Toronto condo market represented 51% of the sales and detached homes represented 26% of the sales. There are numerous reasons behind the popularity of Toronto condos. The topmost reason among them is the affordability factor and then comes the lifestyle choices for the younger generation as they lead very busy lifestyles and perhaps don’t have sufficient time to devote towards the maintenance issues that a house entails plus condominiums provide a great sense of community and security.
What are people actually buying when they are buying Toronto condos?
The primary preference for investors remains one bedroom and dens i.e. 1+1 and this preference clearly dominates by a large margin. This is because of the obvious reason that they can rent the unit as a 2 bedroom solution which would appeal greatly to students. In the recent years there is tremendous increase of foreign students coming to Toronto for various studies. The secondary preference is the 1 bedroom unit followed by the 2 bedroom units. In the present scenario there is not a great demand for 3-bedroom units but probably as the years pass on and affordability becomes more of an issue it is estimated that families will turn to 3 bedroom units as a feasible choice.
Experts say that there are some strong market fundamentals for 2013. There are total 237 new high-rise builds under construction which represents 60,713 new units approximately. There is another surprising statistics which reveals that by the end of 31st Dec 2013, 88% of all those units are expected to be sold out. Statistical research highlighted some important aspects of the Toronto Condo market which says that if the housing needs keep pace with our population growth, then housing supply is not sufficient to meet this growth.
Research has revealed Canada as the most urbanized country in the world. Canada is 30% ahead of the United States and just ahead of Australia in terms of urbanization. Predictions for bank interest rates for 2013 are that interest rates will remain low for the foreseeable future. For the 5th consecutive year Canada’s banks have been rated as the most sound in the entire world. There are number of Toronto condo projects seem to be coming up to the market this spring accelerating the demands on the construction industry. 2007 (beginning of 2008) was remarkable year in the history of the Toronto condo market. This year had record breaking sales numbers week long line ups to purchase preconstruction condo units. With the current state of the economy south of the border it is inevitable that the Canadian economy will be affected by the United State’s slowdown. Investors are wondering what this means for the Toronto Condo market and are we in a condo bubble ready to pop?
Undoubtedly Toronto Condos make a smart Investment due to the following reasons –
- Lending Institutions – Most of the Canadian banks has tighten up terms and conditions for lending than U.S. counterparts to ensure that the borrowers can truly afford their financial obligations. In the year 2006 and until June 2007 only 1 in 400 mortgages went into arrears in Toronto. It is interesting to note that the Interest rates remain low and are expected to decrease in the near future, keeping Toronto condos affordable.
- Affordability – Majority of fresh buyers and young families are turning towards condos as the price of single detached homes continues to rise. In Feb 2008, the average selling price of a detached resale home in the central regions of downtown Toronto and North York was over $800,000. This price made it virtually impossible for first time and young buyers to become home owners in the core areas. It is said that Condos remain the most affordable ownership option for central urban living.
- Diversified Labour Market – Toronto has diversified and stable employment market offering numerous jobs in finance, professional, insurance, scientific and technical services out numbering those in the manufacturing units. Toronto also has remarkable employment levels with unemployment levels at about 6.8% in 2007. This diversified and stable employment market is less vulnerable to widespread job loss than surrounding suburban cities.
- Population Changes – Toronto being the capital of Canada is among the largest city having population of over 5 million residents in 2006 which is constantly growing and changing day by day. In 2007-2010 its population is expected to increase by an average of 1.9% annually creating a demand for new housing. This changing population is creating a demand for different types of housing. Households already exists are downsizing as the children of the baby boomers are leaving the home.
Hence Condos remain the most affordable ownership option for urban living. Recent demographic changes along with a growing population will continue to create a healthy demand for Toronto Condos. Number of construction companies has helped to fuel a condominium construction boom in “Greater Toronto Area” with the Toronto condo market.