With the housing demand in Ontario reaching an all-time high many buyers are looking at condominiums as an option rather than single-family dwellings.
If getting into the market is something that appeals to you or if you are looking at downsizing your space and home upkeep, a condo could be an interesting option.
Before making your decision, consider the pros and cons of purchasing a condominium in Ontario and know the different types of condos available to you.
IS IT A GOOD IDEA TO BUY A CONDO IN ONTARIO?
First of all, not all condo corporations are the same. Knowing the differences can help you make the best decision for you.
The Condominium Authority of Ontario separates condos into two main categories: Freehold and Leasehold; however, several sub-categories determine what you own and what the corporation owns. While freehold gives condo owners more individual authority over their property, leasehold offers owners more freedom to do less maintenance and upkeep to their home.
Careful consideration of these differences will give you more information about what suits you best. (1)
Cheaper to Purchase
On the whole, condominiums are generally less expensive to purchase upfront because they take up less land. You may be able to purchase a condo for a lower price than a single-family home and still achieve your home ownership goals. This can be a great way to stop paying rent and start building up equity in your dwelling. (2)
The CMHC predicts that Canada will need 3.5 million homes by 2030 and with a significant supply shortfall in Ontario, a condo may be a great option. With rent continually on the rise and no end in sight, purchasing a condo is worth researching, especially if you’re used to living in an apartment-style building anyway. (3)
Cheaper to Maintain
Depending on the type of condominium you purchase, maintenance fees will vary. For instance, if you purchase a “freehold dwelling,” you are responsible for maintaining the interior and exterior of your home, including yard maintenance, snow removal and condo breakdowns.
However, if you purchase a unit that attaches monthly maintenance fees to your condo, the corporation that owns the building or row of units is responsible for the building and outdoor maintenance and if applicable, the repairs to the building’s gym and pool. Depending on your lifestyle and handiness, these fees can reduce the money coming out of your pocket for big-ticket items and free you up to enjoy your time, rather than pulling out your hammer and shovel. Many condo owners appreciate the peace of mind that they receive from knowing that they won’t be responsible for the care of their building. Plus, knowing that your neighbouring condos are going to be just as well-kept as yours is also a bonus.
Insurance is usually cheaper
Just like any insurance, the cost of condo insurance depends on several factors: the type of condominium corporation, coverage requirements, how the condo will be used and the type of condominium agreement in place. These intricacies make condo insurance more complex than in past years.
Assuring that you have the right coverage is essential to protect you, your family and your belongings.
Overall, the cost of condo insurance can be less than insuring a single-family home, but consulting the right Ontario home insurance company is necessary to protect your investment.
More Condos Available in Downtown Areas
According to PreCondo.ca; “Of the 148,663 new homes built across Canada in 2019, only 38,766 (26%) were single-detached homes. The remaining were condos (55%) or other townhomes and semi-detached style buildings.” (4)
Typically speaking, people who live in urban centres, do a lot of living downtown. With easy access to public transit, restaurants, and nightlife, living where you work and play has become very attractive. Because downtown core areas are short on land, condominium buildings have soared. It’s easy to choose the area that you are interested in. Just visit NewHomeFinder.ca
More Opportunity to Socialize
Not interested in a long commute? Is driving to work from a bedroom community, an hour or two outside of the city reducing your socialization and relaxation time? Then why not consider living closer to the action? With restaurants, gyms, cafes and city parks available just outside your doorstep, the condo lifestyle can improve many social aspects of your life. Not only will you interact more with people in town but your suburban friends will love visiting your new condo in the city.
You might think that living in town might limit your nature walks. Not true! You can explore a variety of parks, gardens and beaches while living downtown in your condo and not have to start that lawn mower or rake any leaves. Here are a few options to get you started:
- Haldimand: Parks & Pavilions – Haldimand County
- St. Catharines: Parks and Facilities
- Niagara Falls: Parks and Recreational Facilities Listing
WHAT ARE THE DRAWBACKS OF BUYING A CONDO?
Smaller Asset
Most condominiums have a smaller footprint than an average single-family dwelling. This can affect the value of your property. According to MPAC (Municipal Property Assessment Corporation), four main factors determine the value of your condo:
- Age
- square footage
- location
- quality of construction
It’s important to review this criteria when considering purchasing a condo. A condominium property evaluation does not include the fifth factor, ‘size of the lot,’ that is included in the evaluation of a single-family home and therefore, will likely have a lower assessment than a single-family home. (5)
Condo Fees
Are Condo Fees worth it? Do condo fees go up every year?
Condo fees are determined by the corporation that owns the building and/or land surrounding the condominium. They will vary depending on the amenities that are provided by the condo association.
They can range from community pools, meeting spaces, gyms, snow removal and yard maintenance just to name a few. Talk to current owners to get a sense of how well the association cares for its members and the property and ask how often the fees increase.
To learn more about the guidelines associated with condo fees, visit:
Fees and Finances – Condominium Authority of Ontario
Less Private
Condo life is much different from a sprawling yard filled with trees and grass. You will be closer to your neighbours, perhaps even next to your balcony or deck. If it’s a highrise building, you will encounter your neighbours in the hall, elevator and perhaps in the gym. This is something to consider when purchasing a condo.
Are you comfortable with meeting your neighbours face to face daily or do you prefer the privacy of your backyard?
WHAT’S THE DIFFERENCE BETWEEN CONDO INSURANCE AND HOME INSURANCE IN ONTARIO?
Home Insurance
Home Insurance includes everything inside and outside your home. It covers all of your personal property and protects you and your family from emergencies that are out of your control. When you make improvements to your home and increase its value, it’s important to call your insurance company to let them know so that they can reevaluate your coverage. Making some improvements can even lower your rates. For example, if you install new eavestroughs and gutter guards, which help to clear water and debris from your foundation, you may be able to reduce your insurance costs due to claims risk or frequency because you are improving the maintenance of your building.
Condo Insurance
Because every condo unit is different, there are very specific details that need to be assessed for condominium insurance. Depending on the type of dwelling and the agreement between you and the condo corporation, the coverage you need is specific to that agreement. Things to consider range from the age of the building, fire alarm and safety features, the value of the items within the property that the corporation is responsible for in the event of loss and what you are responsible for should the unexpected happen. Having an insurance company that understands these intricacies is key to your piece of mind.
Whatever you decide, getting into the housing market is one of the biggest financial decisions that you’ll ever make. Do your research and have reliable businesses behind you that know how to make this life-changing decision, the right one.
Erie Mutual Insurance proudly serves the commercial insurance, farm insurance, home insurance and auto insurance needs of members throughout Southern Ontario including Haldimand, Niagara and Hamilton.
Please don’t hesitate to contact us with any questions you may have about this or any other topic related to your insurance.
—————————————————————————————-
SOURCES
1 – What is a Condo – Freehold and Leasehold
2 – New study highlights the gap between condo and house prices in major Canadian cities
3 – Estimating how much housing we’ll need by 2030 | CMHC
4 – Precondo.ca
5 – MPAC
—————————————————————————————-
