On the market for a condo? Homebuyers, especially in the hot Vancouver and Toronto real estate markets, are increasingly looking to high-rise living as an affordable housing option; with the average detached house now fetching more than $1.3 million in the city, it’s no surprise the condo and townhouse markets are picking up.
Condo buyers have thousands of building options to choose from, in almost every corner of the city, at an array of price points. And, as proven by the increasingly crowded skyline, a flux of brand-new units are constantly coming to market.
A newly-built condo offers the appeal of sleek design, luxurious finishes, and the latest technology and appliances. Many come with gleaming amenities such as common party areas, gyms and pools. If you’re purchasing directly from the developer, you may even be able to choose the look and feel of your unit. But buyers should take note – buying a brand new build doesn’t suit everyone’s needs. Here’s what to consider when deciding between a new condo, and an older, established building.
Older Buildings Have More Space
The saying “they don’t build them like they used to”, is especially applicable to condos. Building design has evolved drastically over the last decade; while older buildings were often made with solid brick and cement walls, developers now favour floor-to-ceiling windows trimmed with steel. Unit sizes have also shrunk over the years, as space comes at a premium. While today’s average two-bedroom unit may be 700 square feet, older units tend to be much more spacious (like this Yonge and Eglinton-area condo for sale, which boasts 1,119 square feet!).
Newer units tend to have an open concept design, with space focused in a combined living and kitchen area. An older unit is more likely to have a separate area for the kitchen, as well as larger bedrooms.
You Won’t Be Surprised by Fees
Older buildings often have higher monthly maintenance fees than new builds, which can be a deterrent to some buyers. However, while you’ll save on fees for the first few years in a new building, understand these costs are artificially low and will rise over time.
Components of a new building may still be under developer warranty, which can keep emergency costs down. The building has also yet to be subjected to the accidents and repairs most structures experience over the years, such as fires and floods. Unit owners can expect the cost of these repairs – and the resulting rising insurance premiums – at some point in the future. It’s also unknown how the building in general will hold up over time. Will its glass walls need to be replaced within a decade? Will it require extensive repairs for its elevators or amenities?
By contrast, an older building’s fees have stabilized; its operating and maintenance expenses are clearly understood by the board and accounted for in the budget. It will also have a healthier emergency or reserve fund, saved over time for foreseeable repairs. Some older boards also include hydro and power in their monthly fees – plus, you’ll skip paying HST on a resale condo purchase.
The Neighbourhood is Move-In Ready
Older buildings tend to be located in some of Toronto’s most established neighbourhoods. In addition to the colourful culture, rich dining and shopping options found in these coveted areas, they are also likely well-served by transit, school boards, and other city infrastructure.
New builds, on the other hand, are often built in previously non-residential areas, and in multiples. Your building may be surrounded for years by the ongoing construction of its neighbours. The local neighbourhood may be a former industrial zone, and new businesses have yet to move in. There might be a lack of grocery and convenience stores, not to mention fine dining and entertainment options. Schools and community centres may not appear until they’re supported by the local population, which could take a number of years. Take, for example, Toronto’s trendy Liberty Village and City Place neighbourhoods, where children must be bussed to other school districts.
Your Neighbours Are Actually Invested
The most common buyers of newly-built or pre-construction condos tend to be investors who either plan to flip their units at a higher price or sublet them out to renters. According to research from think tank Fortress Real Developments, domestic real estate investors account for 25% of the market in Toronto. That means if you plan to live in your newly-built condo as an owner, you’re probably in the minority. Your neighbours are likely renting and not as concerned as you are about the long-term condition and financial health of the building.
Older buildings, however, tend to have a greater ratio of owner-occupied units – people who plan to dwell there long term, and have a personal interest in keeping it well-maintained. They’ll likely be more involved in how the building is governed, engage directly with the condo board, and actually attend owner meetings. In newer buildings, these meetings often have lower attendance, as investor owners can appoint the board as their proxy in voting matters, leaving fewer people to make important decisions affecting all residents.
Seek Out Expert Advice
Whether you plan to buy a brand new or an existing condo, it’s important to work closely with a real estate professional, who can help you choose a property based on your needs and living preferences. For example, an agent will likely recommend an existing building for a growing family who needs close proximity to good schools and wants an established community. Those who want to move into their new homes immediately will also likely have better luck with an older building, as pre-construction condos can face long, unforeseen delays during the building process. Make sure your condo unit has the features you need to enjoy your real estate investment – and your home – to the fullest.