A few years ago, mortgage insurers and lenders began to really toughen up their lending guidelines for condos – convinced this particular segment was overheated and over built, and headed for a huge correction. Mortgage brokers and their clients increasingly turned to private mortgages for refinances as the appetite simply was not there from institutional money.
But now perceptions of the condo sector have changed recently, as this market segment remains hot. Historically, condos were a niche market – a cool product for certain types who perhaps craved the chic lifestyle of condo living. Too often we look to the past to guide us in our expectations for the future.
The reality is there are many more condos out there at a decent price point than there are single family homes. They are affordable. Society is shifting. Many young people are moving into condos and staying there; forging lives for themselves even when young children come on the scene.
Also, some baby boomers are cashing in their large equity gains, and downsizing their homes to a condo lifestyle, while putting the excess funds to good use. Some are investing in new ventures, others are buying vacation homes, and a significant segment are helping their adult children enter the real estate market.
Thus the demand for condos is much broader and the pool of buyers much deeper than it has ever been.
The music is definitely still playing for Toronto real estate. In fact, according to this October, 2014 Globe and Mail article, the market in major cities country wide is also very husky. And in particular, condo sales were up 21% year over year.
Toronto Life article : In a city where space is at a premium, tiny condos are the new family home