Are You Surprised that Condos are still the Most Affordable?
It wasn’t that long ago that we reported that baby boomers are looking towards home renovations rather than selling off the family home and downsizing when they’re older. A new survey from BMO Capital though, shows that may not be the case after all. And that older clients are now looking towards super affordable condos.
“Condos remain an affordable alternative to the pricey detached market in some major cities,” said Sal Guatieri, senior economist at BMO Capital Markets. “For example, a typical Toronto condo today requires just 22 per cent of a median family’s income to service. Vancouver condos – while more expensive – are still affordable at 28 per cent of income.”
And, according to the survey, many of those people buying condos are older individuals. The survey results showed that 30 per cent of respondents over the age of 50 are looking to buy a condo, while only 17 per cent of those under the age of 50 were considering a condo.
And perhaps not surprisingly, those who are most willing to buy condos are located in some of the most expensive Canadian real estate markets. 33 per cent of buyers in both Toronto and Calgary said that it was affordable condos they were looking at, as the the pricey single detached homes just continue to slip out of their reach. Both of those numbers are fairly consistent with buyer’s intentions last year.
But the same can’t be said for all condo markets – both Vancouver and Montreal saw decreases in their condo interest. Intentions to buy condos in Vancouver fell to 28 per cent from 33; while Montreal is down to 24 per cent from 27 per cent.
As some consider this good news for the condo markets across the country, one still has to be careful about saying that they’re “booming.” Urbanation Inc., a condo analysis firm, has released numbers showing that interest in condos is down across the board from last year.
According to their number, only 2,728 new condo units were sold in the first quarter of this year. That’s down more than half – 55 per cent – what we saw in the first quarter of 2012. That also represents a 29 per cent drop from what we saw in the last quarter of the year last year.