There is an increasing demand for condos as freehold home prices continue to rise. Last month, condo prices throughout the entire Greater Toronto Area saw an average 33.1% increase over March 2016.
Sales of condos were also up — 23.9% over March of last year.
Home buyers are quickly embracing the condo lifestyle not just for its convenience but also due to the affordability. It just makes sense for first time home buyers to enter the real estate market at an affordable price point. And that means buying a condo.
Two types of condo buyers driving prices
Who’s driving the price of condos upwards? First time buyers, and downsizing buyers.
First time buyers entering the market with a limited downpayment find condos affordable. The lower price segment makes homeownership easier. Increased down payment for homes over $500,000, along with the higher costs of entering home ownership with the high average prices of freehold homes have made condos an attractive option.
Competing with first time buyers are those downsizing from larger homes. Downsizing buyers are looking for smaller places to live that require less maintenance. Selling a larger home that they’ve built up equity in also lets them free up some of their financial resources especially if they’re planning to retire.
Is there a scarcity of condo listings?
Part of the driving force of condo prices going up throughout the Greater Toronto Area has been the limited availability of condo listings. Limited inventory has resulted in bidding wars on condos. This has resulted in double digit price growth unseen in recent years for the condo market.
Scarborough condos have risen drastically especially in very popular areas such as the Scarborough City Centre areas. Condos sold in several buildings including those on Grangeway and Town Centre Court have surpassed historical sales records.
What should a seller do?
Condos remain in very high demand especially with the scarce listing inventory. Sellers should show value by presenting their condos well, pricing competitively and having their Realtor market the condo for maximum exposure. Although homes at higher price points are not seeing as many offers on offer presentation night (and sometimes none at all), condos in very high demand areas are seeing a lot of showings and pre-emptive offers. Be prepared to have a busy schedule if you plan to stay at your condo during showings. Otherwise find a place to stay during your marketing period.
What can buyers expect?
The condo and townhouse segment of the market in Greater Toronto Area and within Scarborough will remain strong due to the affordability of this price range. Buyers will still see multiple offers on listings that are priced competitively. Be prepared to do your homework before making an offer on a condo. Does the seller have a current status certificate available? Are you pre-approved for financing? Is your Realtor informing you about the selling prices and where the trends are headed for that particular building?
It’s good to do your homework and be prepared in the current market (and in any market condition for that matter).