You can make numbers say anything you want, and the big “number” last month was the average price of a detached Toronto freehold property heading north of $1 Million for the first time ever, at $1,040,018 in February.
Not every buyer is looking for a detached house, of course, although having said that, it’s getting harder and harder to find any single-family house in the central core for under $600,000.
What’s the alternative as we move forward?
In my opinion: it’s condo townhouses. If you’re looking for a starter home and you’ve got a starter family, then start looking at condo towns…
If you weren’t such an expert in Toronto real estate, and you didn’t immediately recognize the above photo as a condominium townhouse on Sudbury Street, you just might think that’s an actual house.
But if we’re simply judging a book by its cover, would you really discount the above property without knowing what it was?
What’s the difference between that, and, say – this:
Okay, well, I suppose architecture for one thing, not to mention charm.
But would you be able to tell, unequivocally, from looking at these townhouses on West 78th Street in Manhattan that these are freehold properties?
There’s no question that there is a major difference between a condominium townhouse and a freehold townhouse, but as prices continue to rise in Toronto, I have to think that condo townhouses will play more of a role for would-be home-buyers.
Two weeks ago, I went to check out a condo townhouse in the complex on Sudbury Street, just north of King Street.
It had been on the market for three hours, and I ran into two other sets of agents with their clients.
The main floor of the unit had a reasonably-sized living/dining/kitchen, and then there were two bedrooms at the back, both above-average in size, and the master had a huge walk-in closet.
The “downstairs” was the most impressive part about the unit, however. This unit was split-level, so while you stepped up about 4-5 steps to get to the main living area, you stepped down 4-5 steps to get to the second level. I wouldn’t call this a “basement” by any stretch, as the window is at eye length, and it’s a massive open space where you could comfortably seat eight people on a sectional couch, OR……..perhaps have a child’s plan room.
For $580,000, including a 2-car (tandem) garage that is accessible from that lower-level, the price is fantastic.
Show me an alternative in the form of a freehold property, and I’ll probably be looking at an MLS listing from 2006…
This, ladies and gentlemen, is a fantastic alternative for those who can’t afford a single-family dwelling, and depending on your lifestyle at the time of purchase, it might work out even better than the freehold house.
My first-time house buyers often lament, “We really love the downtown lifestyle, but we want to get into a house.”
A condo townhouse essentially allows you to both, by keeping the location downtown (think King West, for example), but moving away from high-rise, and into what feels like a “home.”
For many people, the hallmark signs of a “home” are staircases, and multiple levels of living, as well as the quaint, cozy, vibe of a red-brick, 3-storey dwelling, which most condominium townhouses are. Sure, they’re all attached at the hip, and most family neighbourhoods are a good mix of detached, semi-detached, and row-houses, but you’re never going to find a true “house” in a condo, nor a condo in a house.
In a perfect world, every Torontonian would be able to afford a freehold property, but the “price floor” in the city continues to rise. I used to tell people, “We probably won’t be able to find anything under $500,000.” Then that became $550,000, and then $600,000.
Last year, I sold the following houses under $650,000:
1) $600,000 – 2-bed, 1-bath, rowhouse with no parking, on a side-street, in Beaches Triangle
2) $582,824 – 1-bed, 1-bath house with unfinished basement – good for one person, south of Danforth.
3) $641,813 – 3-bed, 1-bath, complete and utter gut-job that needed $150K, south of Danforth.
4) $530,000 – 1-bed, 2-bath, no basement, no parking, century-old Victorian that was bought as an income property, East Beaches.
5) $500,000 – 1-bed, 2-bath, split-level (built on a downslope), with parking. South of Danforth
6) $616,000 – 2-bed, 1-bath, detached, with parking, Woodbine/Mortimer.
That’s all, folks!
I sold over thirty freehold properties last year, and only SIX were under $650,000.
Not only that, three of the six were glorified 1-bedroom houses that really just serve as condo alternatives.
So when I meet with would-be home-buyers today, I often tell them that they’re going to be hard-pressed to find what they want for under $650,000, because believe me – nobody comes to me and says, “We want a 1-bedroom house.”
Stop me if this has gone from being “honest and helpful” to “downright depressing,” but I’m sorry folks, you just can’t get a 3-bed, 3-bath house for $650,000 anymore, or at least not west of Victoria Park.
But this blog post is supposed to be uplifting, as I really, truly do believe we’re going to see a trend in the next couple years of would-be house buyers turning toward 2-bed, 2-bath condo townhouses as an alternative.
And you know what? The prices are great.
Tonight, I showed a 2-bed (formerly 3-bed, but converted to one large master), 2-bath townhouse, corner unit, with parking, for $549,000, just northeast of King & Strachan.
If you’re a young couple with a baby, or with one on the way, this is an inexpensive and stress-free solution to the ever-increasing single-family housing market.
For one thing, it’s about $100,000 less than what the same idea might cost you in a freehold.
And before you complain about maintenance fees, let’s look into those.
$535 per month, and that includes your water and gas, but you pay your own electricity. So what does it cost you for water and gas in a house, each and every month? Maybe $200? So yes, you pay an extra $300 “for nothing,” but you’ll never have to pay to fix your roof, leaky basement, replace your furnace, etc. That’s what the $300 “for nothing” goes towards.
Now consider the property taxes here are about $2,000 per year LESS than a comparable freehold, and suddenly the monthly fees, and maintenance, might work in the favour of the condo.
Perhaps this conversation is ironic, given Monday’s blog post about living in a house versus living in a condo, but as I said at the onset, if we all had unlimited resources, we’d buy detached houses on 50 x 150 foot lots. But that’s not the case, and it is never going to be.
I still live in a high-rise condominium, and at 35-years-old, I do plan on having my first child here. My wife and I have talked about it, and while “raising a child in a house” sounds great, neither of us are ready to move on from the condo. It suits our lifestyle, and helps us tremendously in our occupations, and it’s the right place, for now.
So I’m not saying you can’t have a child in a high-rise condo, but many of my first-time house-buyers come to me because they want to start a family, and they think that it just can’t be done in a high-rise condo.
To each, their own.
But if you don’t want to have a child in a high-rise condo, and you can’t afford $800,000 for what you “want” in a freehold house, then consider a condominium townhouse.
One thing is for certain: no more condo townhouses will ever be built downtown.
Do you think that if a developer had a half-acre of land at his disposal, he’d build a bunch of 3-storey brick townhouses, or a monster 70-storey condominium?
If you need help making a decision from our good friend “supply and demand,” then I think the sheer fact that no more condo townhouses will be built speaks volumes to how prices will appreciate as more and more people want a product that’s in lower and lower supply.
I have a young couple, expecting a child, who are looking at a condo townhouse as we speak, and they sent me the following “summary” of Pros & Cons tonight:
- Multi-Level layout with the traditional house “feel”
- 2-bedroom, 2-bathroom floor plan with 2nd bedroom more than big enough for a nursery
- Quiet street, leafy, tree-lined, with street parking if we need a second car or for parents
- Red brick construction “like” a house
- $150,000 cheaper than XX House (something they had also considered around $700K)
- Lower taxes offset high(er) maintenance fees
- Get to stay in King West and literally move three blocks
- Zero maintenance and upkeep needed; spend more time with the babe
- Rooftop terrace is “urban backyard”
- Not a house
- Appreciation potential not as good as a house
And that’s it.
That’s the extent of their list.
I don’t disagree with any of what they wrote, and we have to remember that there are different priorities for everybody.
My clients are in their mid-20’s, and all their friends live downtown. They briefly considered moving out of the city where they can find a larger house, and where they can get support from their parents, but that option was dismissed rather quickly.
I’m doing more and more showings on condo townhouses, and they’re becoming more and more in demand. I’ve already lost in multiple offers twice this year alone too!
Three years from now, if the townhouse complexes on Shank, Canniff, Douro, and Sudbury are renamed “Babyville I, II, III and IV,” then you can say you heard it here first…