Cheap Condos in Toronto – An Urban Myth?
One of the world’s most diverse cities, Toronto is Canada’s financial capital and leading technology hub. And it is no surprise that it is a significant destination for immigrants and tourists.
A Cultural Mosaic
Toronto is a prominent center for the fine arts, such as music, theatre, television, and movies.
The vibrant metropolis has a strong economy based on technology, design, financial services, life sciences, education, arts, fashion, aerospace, and environmental innovation. There is no denying that Toronto offers multiple employment opportunities in diverse fields. And thousands of students apply for admission to its world-class educational institutes every year.
As per the latest Statistics Canada data, Toronto has seen a 2.3% population growth rate over the past five years, adding to its solid multicultural vibes. The city offers its residents an eclectic city life – a mix of shopping malls, an entertainment district, and natural attractions such as beaches, museums, and park trails.
Expensive Real Estate
As you can imagine, all these desirable attributes make Toronto one of the most expensive cities in Canada, if not the world. Real estate in Canada’s largest city and the Greater Toronto Area is among the priciest in the country. Happily, however, the advantages of living in the city are worth it and Toronto ranks high on the best places to live in Canada.
Condo townhouses had an average price of $803,964 and a 2% annual gain. A Condo apartment’s average price increased by 3% year-over-year to $731k.
You can take a quick look at September 2022 home prices in the GTA (courtesy of WOWA.CA) in the table below,
Why are Condos a Good Choice for First Time Home buyers?
Many first-time homebuyers are excited about buying their first property in the city but feel that a house in Toronto is too expensive. Generally cheaper than houses per square foot, condos and apartments have become an obvious choice for homebuyers and investors.
What is a Condo?
A condominium (or condo for short) is a building divided into several units that are each separately owned. Additionally, the owners of the individual units also collectively own the common areas of the property, such as corridors/hallways, walkways, laundry rooms, etc., as well as common utilities and amenities, such as the HVAC system, elevators, and so on. Condos can be low-rise, mid-rise, or high-rise buildings.
On the other hand, an apartment is defined as a simpler residence unit that is usually rented, and is often part of a larger residential building.
Photo Courtesy: Unsplash
Apart from residential condominiums, detached condominiums are also increasingly popular in recent years. These properties look like single-family homes, but spacious gardens, corridors, building exteriors, streets, and recreational facilities are jointly owned and maintained by a community association.
Condo fees are monthly or yearly costs that buyers must pay towards operational costs and cover maintenance fees, reserve fund contributions, and utilities. In recent years, most condos offer additional amenities such as a fitness center, indoor pool, and party room.
Valet parking, concierge service, etc., are some of the services provided in upscale condos. Buildings with these facilities charge more due to the higher maintenance fees, and associated expenses of upkeep and administration.
Just in case you are interested, the average maintenance fee for condos in Toronto is about 64 cents per square foot.
Average Prices of Condos in Toronto
In 2022, the Greater Toronto Area (GTA) condominium apartment market followed a similar trend to the country’s real estate market, with stronger year-over-year price growth in the suburban regions surrounding Toronto.
Toronto Regional Real Estate Board (TRREB) President Kevin Crigger said that the lower average price point in the condo segment had performed better than many low-rise market segments since the Bank of Canada rate hikes in the spring.
The average selling price of Toronto Condos in Q2 2022 rose 12.2 percent year-over-year to $769,999.
Though the sale of condos had a brief slowdown at the beginning of the pandemic, the cheaper entry prices of condos versus freehold homes have provided an alternative option for purchasers looking to mitigate the impact of higher borrowing costs.
Where Should You Look For Cheap Condos in Toronto?
The Toronto real estate market is home to thousands of condos, and there is a wide variety of options for a home buyer to choose from.
Various Options Available
If you have the money for a down payment, you can look for condos in an existing building, AKA resale. Or you may buy new condos in a project that is in development, i.e., pre-construction. Both have pros and cons, and you must decide which option is the best for you.
To avoid expensive mistakes, you can identify real estate professionals who can guide you through the listings, documents, mortgages, and condominium terms. An experienced Realtor (a licensed real estate agent or broker who is a registered member of CREA, the Canadian Real Estate Association) will help you determine which developers, property managers, and locations are the best choice.
First-time buyers should not hesitate to explore other areas in Toronto or to ask their agents which areas might work best for them.
Buying Vs Renting
You may also decide to rent a condo apartment instead of buying one. Renting is a good idea if you don’t have the money for a down payment, nor do you want to take any risks.
Buying a property makes better sense if you know where you will be in 3 to 5 years. Also, you need to consider the inevitable maintenance and renovation costs and ensure that you can afford the place you wish to live in for at least several years.
Location, Location, Location
The location of your property is one of the most important factors when considering an investment. The choice of neighborhood will have a significant impact on the quality of your life. You will have to balance your choice between affordability and proximity to your workplace, university, etc.
These are some of the most popular neighborhoods in Toronto: the Entertainment District, Distillery District, Chinatown, Kensington Market, Little Italy, and Queen West.
The Toronto Entertainment District in downtown Toronto is home to theatres, performing arts centers, and family attractions. The Distillery District area of Toronto is a historic neighborhood in a desirable location and is a short walk to retail centers, art galleries, and unique coffee shops. The Financial District is a dynamic, happening neighborhood near the downtown core. Yonge St. and Eglinton Ave. is another lively area conveniently located close to downtown Toronto.
The Financial District in Toronto Photo courtesy Unsplash
Suburbs and Nearby Cities
In Toronto, the city suburbs are the best bet right now, with living space in the established urban centres becoming more expensive. If you are prepared to commute to the city, the GTA housing market provides you with many choices. Offering quick and easy access, the surrounding towns such as Etobicoke, Brampton, and Mississauga are more akin to suburban Toronto. They are hugely popular with families and people who work in the city.
Cheapest Condos in Toronto
These are a few of the cheapest condos currently listed for sale at below $600k in Toronto and the GTA. You can browse through condos in Toronto on www.savemax.com for more listings.
1. A one-bedroom unit at the Centro Condos on 190 Borough Drive, this open-concept condo is located in the heart of Scarborough. The 500+ square foot apartment has a spacious balcony and is in a building with multiple amenities such as a sauna, rooftop terrace, and steam room.
2. A one-bedroom condo at 135 Village Green Sq E, this 700+ square foot unit has a great layout with a spacious balcony, a stylish kitchen with stainless steel appliances, and a breakfast bar.
3. Another 120 Harrison Garden Blvd condo has an open-concept kitchen with granite countertops and stainless steel appliances. Large full-sized windows allow lots of natural light into the open-concept living space.
In addition, there are several affordable neighborhoods in Toronto, such as Yonge & Eglinton, Parkdale, and Kensington, where you can think of buying a condo. Mimico is a popular neighborhood located on Lake Ontario and is an attractive suburb that is only a short drive away from the city. King West is another Toronto neighborhood with plenty of new condos and property listings coming on the market.
The Future of Condos in Toronto
As Toronto’s population increases, the demand for affordable housing is spiraling upwards too. Condos are a better choice for accommodation, especially in densely populated urban areas that offer employment. Also, if you are a real estate investor, you can purchase two apartments for the price of a single detached house.
Immigration and Housing
Experts at Canada Mortgage and Housing Corporation said that the country will require 3+ million additional homes by 2030 to make housing affordable for the growing population. With set to hit 431,000 in 2022 and the government targeting entry of another 900,000 newcomers in 2023 and 2024 combined, CMHC says the current home-building projections will need to be upgraded.
The city of Toronto has long been a magnet for immigrants and is falling short of housing to accommodate the growing numbers. To reduce the housing crunch, Toronto recently allowed the building of self-contained, residential dwellings in backyards; Suburban areas around the City of Toronto will likely expand as the city grows.
The foreseeable future of the real estate market in Toronto is to continue growing upwards. Although we are more used to seeing real estate development along the ground, the focus has firmly shifted from building low-rise houses to high-rise condominiums. In other words, vertical development and condos within the GTA are the future.
High-rise Condos located on the Toronto Waterfront Photo Courtesy Unsplash
Advantages over Houses
The significant benefit of buying a condo, lower price aside, is that condos are low maintenance and typically require lower property taxes than a house. At the same time, you have access to many amenities in even an average condo that you wouldn’t have in an independent home.
And Finally, Are Cheap Condos a Myth in Toronto?
In recent years, Condos are increasingly associated with luxury living, offering buyers an upscale experience. An amazing location, open-concept living areas with a spacious master bedroom and a large balcony, a fully-equipped kitchen, and an ensuite laundry can be part of your life in a condo.
The shared amenities and utilities included in residential condominiums allow you to enjoy a relaxed lifestyle and can be a good value for money. In addition, you have a better chance of socializing.
We recommend buying a condo because you can build equity with each mortgage payment. You also own any appreciation for the value of your condo. Compared to detached houses, condos are easier to manage as a rental investment, which will positively impact your net worth in the long run.
Summing up, finding a cheap condo for sale or rent in Toronto is not impossible, though you will have to search hard. But remember, the prices are on an upswing; you should consider investing in property now.