It’s no secret that single-family homes across Canada are hard to find – so much so that condos are booming again. Just a few months ago every armchair economist and supposed real estate “expert” was talking about how the glut of condos in the market would crash the Canadian real estate market for good.
But they didn’t. If anything, they’ve rescued a slowing real estate market.
With fewer single family homes available, the ones that you can find on the market today are astronomically expensive. If anything, condos are a viable alternative until prices begin to stabilize later on this year and into next year.
Homes in the Top Markets Just Too Expensive for Most
Single family homes, the semi-detached dreams that everyone is looking for, are just too expensive – especially if you want to buy somewhere like Montreal, Toronto or Vancouver.
But condos are different. Condos are right next door to those beautiful homes but can cost anywhere from 25% to 50% of the price in the same market. That means in Toronto where the average home (if you can find one!) may cost $650,000, a condo in the same neighbourhood could cost $350,000. If you only need two or three rooms, and that could be the magic number that makes the best neighbourhoods a little more affordable.
Home Prices Moved 2% Year on Year
Condo prices across Canada have gone up by 2%, while single family semi-detached homes are up by as much as 12% year on year, depending on what city you’re looking at. That’s a major price difference!
The bad news for those traditional homes sales are actually tapering off – prices aren’t rising because homes are just that much more valuable – it’s because the supply of homes has dwindled.
This is great if you’re a seller; but with home prices and home sales expected to level off through the rest of the decade, if you’re thinking about buying you’re going to get the short end of the stick.
Understanding that you won’t see a 30% jump in the value of your home in the next five years (no matter what your realtor tells you) means you won’t worry about the home you do buy 10 years from now not being a good return on your investment.
Condos Sales Rose 12.6%
While home sales have stalled, condo sales rose almost 13% year on year. It may be the short supply of homes on the market, it may be the more attractive prices, but either way, condos are a huge hit.
There’s no doubt that greater condo sales have helped the rest of the real estate market hit a soft landing. It seems like all those rules that came out of Ottawa have actually worked, that there will be no American-style housing crash here in Canada.
Only time will tell! Are you thinking about buying a condo? Do you think the extra cost of a single family home is really worth it?
The Goodale Miller Team is the #1 team in Canada for Century 21 11 years running. Specializing in Oakville luxury real estate including Lakefront homes, infill building lots, condominiums and more. You can visit their website here.