Last year the prices of condominiums in Toronto increased by 22%, reaching $523,437. In 2017, Ontario government enacted several regulations to control the estate market of the city. But that could not prevent the price hike of condominium. However there is a distinct contrast between rise in the price of condos and detached homes. There has been a moderate rise of 8% in the detached home market in Toronto. The price of per square foot of condo is higher than the price of per square foot of detached family home throughout the country.
Both low-rise houses and condominiums are found in Maple, which is a neighborhood in Vaughan. The estimated price of a 1,385 square foot row house in Maple is $685,000 approximately. Similar sized 3 bedroom condos are not available in Maple. But based on the price of a 2 bedroom condo that is almost $684 per square foot, a 1,385 square foot condo in Maple will cost something around $947,000. Thus the buyer has to pay an additional $261,000 for a condo in Maple in comparison to a row house of similar size.
Some other market trends worth noting
A neighborhood in central Toronto, Leslieville, also hash both condominiums and houses. The price of a 1,355 square foot starter home is approximately $1,150,000. For condos, with $851 per square foot, the average price of a 1,355 square foot condo is $1,150,000 which is same as that of the houses in Leslieville. But a house provides other benefits such as basements that make the living space in houses 50% larger than that of condos. There is also access to a private backyard in the house. If these living spaces are considered, then on the basis of per square foot, the price of a house is much less than the condo.
Among all the cities that were measured, the prices per square foot increased the most in the Greater Ottawa. There has been a 17.9 per cent rise year-over-year to $395. The highest reduction in prices took place in greater Vancouver by 8.3 per cent to $764. A buyer in the GTA who has a budget under $400,000 usually lives in a condo as it is impossible to buy low-rise homes on a $400,000 budget in spite of the fact that they are paying a higher rate for per square foot to live in a condo as opposed to a house.
Experts decode the market phenomenon
Most of the new condominiums are constructed on the demand of the investors who are willing to pay more than the end users. Further the smaller units are less expensive than larger units and have a better return on investment. The developers have to pay the price for land in accordance to what the investors are willing to pay for the condos. That is why building affordable family sized condos is difficult for them.
The condos are considered to be the present and future of the community. They have more development opportunities in spite of being small and are able to satisfy the lifestyle expectations of homebuyers as well as the increased demand for housing. The most expensive condo market in the country is the city of Vancouver where homebuyers have to pay $1,044 for per square foot for a condo. For a single detached home in Vancouver, homebuyers have to pay $1279 per square foot. With a decrease of 6.7 per cent to $313, the lowest per square foot price of a condo is offered by Greater Calgary. The price in the Greater Toronto increased 9.1 per cent to $743 while the price in Greater Montreal area rose by 10.3 per cent to $632.
The difference in prices between condos and single detached homes in both Toronto and Vancouver is due to a couple of reasons. Out of them, affordability seems to be the most probable reason. The cost of condos is less than that of homes and home prices are beyond the reach of first time home buyers and young families. Secondly, there is a great demand from foreign buyers for centrally located condos in Toronto and Vancouver.