Top 6 Reasons Not to Buy a Condo in Toronto
Toronto is one of the most expensive cities in Canada, but it's also a city on the rise. Toronto is home to many beautiful and desirable neighborhoods that are attracting buyers from all over the world. If you're thinking about buying a condo in this bustling metropolis, here's why you might want to think twice.
#1. The Toronto Condo Market isn't cheap
The cost of real estate in Toronto has risen rapidly over the last 20 years, in both condos and houses. Condo prices in Toronto range depending on several factors such as the location, age, market demand, how the building is managed, financials and mortgages rates, and qualification rules.
The average price for a condo in Toronto is now $745,000 and a good rough figure is about $1000 per square foot, but some are less than this and many are in the $1200-1400 per square foot range or higher for luxury buildings or neighbourhoods such as Yorkville. A smaller 600 sq ft condo can cost you around $600,000 and a 1000 sq ft condo could be approximately $1,000,000. So if you're looking to buy a condo as an investment or to live in yourself, be prepared to pay a pretty penny. It's a high price point for first-time buyers or young professionals just starting out in their career so renting may be a more affordable option.
#2. Rising Interest Rates
Mortgage rates have been pretty low for the last 10 years but may increase in the future. If you're buying a condo now or thinking about investing, try not to lock into an excessively long mortgage term as this could become very expensive if your rates increase significantly.
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#3. High Condo Fees
Some condos have high condo fees so it's important to know what they are with all your other costs. Some can be over $1.00 per square foot. For example, a 1,000 sq. ft. condo can have $1,000 condo fees, this will typically not include hydro and doesn't include cable, internet or home phone.
It's also to consider condo fee increases in the building you are looking to buy, as they can increase yearly, so try to find an affordable condo upfront.
You should also consider whether you'll need parking and if the building has amenities such as a pool or gym that will incur further fees on top of your monthly dues. It's always best to ask these questions before buying into any new development or resale condo in Toronto.
#4. Living with other people
Living in a detached house is quite different than a communal condo building where you share the common elements. You'll have people above, below, and next to you. If you're someone who likes peace and quiet or enjoys hosting lots of guests, a condo may not be the best option.
Nobody wants to live next to a noisy neighbour having parties or playing loud music late at night. If this is something that may bother you, condo living may not be the right choice. This is a rare occurrence though.
With most condos in downtown Toronto, you can also expect the hustle and bustle of living in downtown Toronto which includes noise from the street, emergency vehicle sirens, and construction. All of which can be quite disruptive, especially if you're a light sleeper.
#5. Condo By-Laws
Every building has its own rules and regulations that all residents, renters, and owners must abide by.
You should review these carefully before buying into any condo project as they can vary greatly from building to building and not be aware that you're breaking a rule could result in hefty fines or legal action against your unit or property.
For example, some condos have restrictions on the number of pets or the weight of the pets - this mostly relates to dogs. So if you are a dog owner with two dogs and the building doesn't allow dogs or only one, this is not an option to buy into.
#6. Lack of control
A condo building is a collective of residents. You can't just do as much as you want as you would be able to in a house. Rules and regulations may change that you don't agree with as owners and board members vote, but not everyone will vote the same way as you. Usually, no one likes to see increases in condo fees but based on the budget and expenses this may be necessary.
You may not use the facilities in the building however you still have to pay your portion of the overall contribution. This can be frustrating if you're not utilizing what's available to you.
There are pros and cons to both living in a condo and owning a house. It really depends on your personal preferences and what you're looking for in terms of lifestyle, convenience, amenities, etc. If you're still unsure which is the best option for you, it's always best to consult with a real estate professional who can help guide you through your options.
Thank-you for reading! Be sure to stay tuned for more blog posts about all things real estate!