Affordability and minimized expenses key factors in condo purchases
From New Homes & Condos Magazine
Canadians considering buying a condo as their primary residence are indicating that living in an “environmentally friendly, energy-efficient building” is an important factor in their choice, according to an Ipsos Reid survey conducted on behalf of TD Canada Trust.
• Nine in 10 say energy efficiency is important to their choice of a condo;
• Other key choice factors include good security; attractive design; close to public transit; close to restaurants, theatres and shopping;
• $400,000 is the ‘tipping point’ for a two-bedroom condo;
• Low condo fees are given high priority in choosing a condo.
The online survey asked respondents to rate the importance of a number of amenities that might factor into their decision to buy a condo. Conducted between March 1 and March 5, 2007, among 725 adults aged 18 and older living in Toronto, Vancouver, Montreal, Calgary and Halifax, 90% indicate that an environmentally friendly, energy-efficient building is either very important (45%) or somewhat important (45%) to their choice. Only nine per cent say it is not really important and one per cent say it is not at all important.
When asked about factors that would dissuade them from buying a particular condo, the leading reason is no parking (79%), followed by insufficient building security (67%). A lack of energy efficiency is also high on the list, with 63% saying it would influence their decision.
Proximity to public transit factored in as a high priority as well, with 80% stating that it is very important (45%) or somewhat important (35%).
“For many Canadians, energy-efficient features can also appeal to their desire to reduce monthly expenses,” says Joan Dal Bianco, Vice-President, Real Estate Secured Lending. “As Green choices save them money, Canadians will increasingly look for energy-efficient features and ready access to public transit when shopping for a condo. It’s a win-win situation for condo owners and the environment.”
The most important amenity is good building security, with 96% saying it is very important (71%) or somewhat important (25%). More women (77%) than men (63%) say it is very important. The importance of good building security also increases with age.
Other key choice factors are an attractive design and proximity to theatres, restaurants and shopping. The least important determinant in choosing a condo is having most residents in the same age range. Only half say it is very important (13%) or somewhat important (37%).
Cost is king
Affordability factors highly in Canadians’ decision to buy a condo. In terms of pricing, $400,000 for a two-bedroom condo seems to be the tipping point, with 86% of respondents saying they would only pay less than this amount. A third (35%) would pay less than $200,000, just over half (51%) would be willing to pay from $200,000 to $399,000, six per cent would pay from $400,000 to $600,000, while only one per cent would pay more than $600,000.
According to another recent study, the average condo price in 2006 in Montreal was $169,899, Toronto $239,816, Calgary $262,456 and Vancouver $289,344, with the average of the four cities being $240,378.
Findings regarding condo fees track closely to pricing preferences. When asked the maximum they would be willing to pay in monthly fees for any condo, 86% say less than $400 and only 13% say more. The breakouts are: less than $200, 41%; $200 to less than $400, 45%; $400 to less than $600, 10%; more than $600, three per cent.
“Condo buyers across Canada largely share a common perception that condos are a more affordable form of housing,” notes Dal Bianco. “Clearly, this affordability comes from a lower purchase price than a house, but condo buyers, who are often first-time buyers or retirees, also want to minimize their monthly condo fees and expenses to get the most for their dollar. As long as these costs continue to be relatively affordable, I think condo living will become increasingly more appealing in Canada’s big cities.”
Trend towards raising children in condos
When asked how likely they would be to consider raising a family in a condo, 29% indicate they are very likely (six per cent) or somewhat likely (23%). This is a significant increase over the findings of similar survey conducted in May 2006. When asked the same question, only 20% of respondents indicated they were very likely (four per cent) or somewhat likely (16%) to consider raising a family in a condo.
Interestingly, almost half (46%) of respondents say that too many children in the building would cause them not to buy a condo unit in it, whereas only five per cent say not enough children would be a reason.
Other highlights
• The likelihood of residents in the major Canadian cities to purchase a condo as their primary residence has increased by four per cent since June 2006.
• A greater proportion of women than men say energy-efficient buildings are very important (50% versus 40%). As well, the propensity to say it is very important increases with age: 41% for the 18-34 year-old age bracket; 43% for 35-54 year-olds; and 50% for those aged 55 and older.
• Residents of the Greater Vancouver Area are the most likely among the five cities surveyed to consider purchasing a condo as their primary residence, with 50% saying they would be very likely (22%) or somewhat likely (28%) to do so. That is almost double the propensity of Montrealers, who are the least likely condo purchasers. Among Montreal poll respondents, only 27% say they would be very likely (11%) or somewhat likely (16%) to buy a condo.
• More than half of respondents say they would plan to live long-term in a condo, with 42% saying “the rest of my life” and 11% saying “from 10 to 15 years.” Not surprisingly, the incidence of those responding with “the rest of my life” increases with age.
• Fifty-seven per cent of potential buyers say it is either very important (18%) or somewhat important (39%) that they are the first owner of a condo. Forty-three per cent say it is not really important (34%) or not at all important (nine per cent).
New Homes & Condos Magazine is an excellent source of housing information for those looking for information on new condos in Ontario, Canada. We offer the most up-to-date information on new communities across the Greater Toronto Area.
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