What Buyers Want In a Condominium
by Jim Adair
Tuesday, May 22, 2012
In Toronto, there are more condos being built than in any other city in North America. Across Canada, condos projects at all price ranges are grabbing home buyers' attention and down payments.
What buyers want in a condo depends partly on where they live, but there are some common themes. A recent survey by TD Canada Trust says good building security and low condo fees are the top features that buyers want. In Toronto, energy-efficient building features and attractive interior design features rank first and second in preferences, while in Vancouver it's "show me the money" – low condo maintenance fees are the No. 1 preference.
Also showing up in the top five of the national wish list is a balcony, parking for a car and proximity to public transit.
It seems Toronto condo buyers also want to party. Contrary to the popular opinion across the country that Toronto isn't the friendliest place, 55 per cent of condo buyers say they are looking for social activities between neighbours in their condo, and a group of neighbours similar to them. In the rest of the country, just 40 per cent were interested in social activities.
Women were more likely than men to want a balcony and environmentally friendly features, while men were more interested in buying a new versus resale unit. A different survey, by RBC, found that women are more likely than men to be first-time home buyers in the next two years.
Vancouver research firms Strategics and MPC Intelligence, in the Metro Vancouver Condo Market Opportunities Report, list the features that draw higher-than-average standardized revenue estimates for new condo builders. They include laminate hardwood kitchen flooring, Viking and Liebherr kitchen appliances, quartz kitchen countertops, vinyl bathroom flooring, glass door bathroom cabinets and quartz bathroom countertops.
The TD Canada Trust poll says most people are drawn to condo living because they require less maintenance, are more affordable than single-family homes and offer amenities you don't get with a house. Three-quarters of those polled said that condo fees are worth the extra money to pay for these benefits.
How much are they willing to pay for those fees? About a third said they would pay up to $200 per month in condo fees, 44 per cent said they would pay up to $400 and 17 per cent said they would pay up to $800. Buyers in Toronto are willing to pay the most.
Because of changes in the Strata Property Act in British Columbia recently, some condo corporations may need to contribute more to their contingency reserve fund for future maintenance issues, which may mean that condo fees will go up. The survey asked condo buyers if they have a buffer built into their budget so they can handle future increases. In Vancouver, 28 per cent of buyers said they had such a buffer built in, and 36 per cent said they could cut back in other areas if necessary to pay for an increase. The numbers were similar in Toronto.
"The possibility of a fee increase can be a little unnerving," says Farhaneh Haque, a director with TD Canada Trust. "While there's no way to 'lock-in' to a monthly fee like you can with a mortgage, you can prepare for a fee increase by building a buffer into your monthly housing budget….That way, if fees go up, it won't be a major shock to your cash flow. If they don't increase, you have extra money to put aside in savings or towards your mortgage."
Condo buyers in Toronto don't believe the doom-and-gloom reports that the market is oversupplied and prices will soon start to drop. Forty-six per cent say recent housing forecasts have made them more likely to buy, while only 17 per cent said they are less likely.
Of those Canadians who are buying condos that will not be their primary residence, 46 per cent think they are a good investment to buy now and sell later to make a profit. Another 42 per cent see the condo as a long-term source of rental income, while 38 per cent plan to rent them now for rental income and then move into the units later in life when they want to downsize.
Toronto residents are the most likely to say they would consider buying a condo as a home for their adult children.
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