Published: December 28, 2014 • Last updated: September 9, 2020 at 16:39 pm
So much has happened since we first wrote this article in 2014. It all came true. Condos did become starter homes, and in big cities like Toronto and Vancouver, the only thing remotely affordable. At the time of writing this update, the condo market has been going through a bit of a down turn, after several years of robust, sometimes crazy price growth.
The fact is, it’s still a great point of entry to the real estate market. Savvy first time buyers will be looking at the current downturn as a buying opportunity in the year ahead. Here is the original 2014 article:
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 overbuilt 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 is 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.