After the recent lockdown in Toronto, the real estate market is going to slow down a bit. If you were considering buying a condo in Toronto, you must be sure if it is the right time to go with the deal or should you wait.
There are arguments both in favor and against buying a property in these times and we are here to help you decide. We have researched the market and we will try to share the pros and cons of buying a condo during this time.
The demand is high
Condos were least liked by many. Small homes, with intruders in the hallway, and some more restrictions. But times like these have reversed the preference for many.
You also would be feeling the same and have realized that this is the time to think of what you need, not what you want. This has led them to think to prefer buying a condo rather than buying a detached home.
As the demand for condos is increasing, so is their price. According to research, the prices of condos have gone up by almost 12% in the past few months (according to July figures).
Though the prices of condos are increasing, the rental prices are relatively decreasing. This could be a sign of worry if the intention is to generate income from renting out the condo. Having said that, it is all a matter of time, in the long run, things would start getting back to normal. And so would the rental from condos.
However, the disadvantage here is that you may not be able to physically inspect the property. You could only pay for a virtual tour.
Decide for the long-run
When you think of buying a condo, you must always think of buying something unique – not for you, but for others. This is best suitable when the key purpose of your buying decision is to rent out the property.
Look for areas suitable for all, paying a good income in terms of rents. Though, people are moving to open areas where they could interact with nature. Large cities might not sound like a good place to invest but in the longer run, people would start coming back and more immigrants would fill the gap. This would then result in higher rental prices.
This is a favor for you – people moving out of the city making homes abundant. This makes the market favorable for the buyers. The prices of the condos might not be as fast as in the suburbs. You could make your bid and buy a condo for less.
Read more: Buying Your First Condo, What to Consider?
Prices are low
While people are moving out of the city, there are relatively fewer buyers in the market. The owners would either have to rent out the condos at a low price or sell at your offer. This makes you the king.
While some say that there are few condo options in the bigger cities, there are even fewer buyers. Which makes it a buyer’s market.
Above all, the interest rates are low, increasing the buying power of citizens. This has another benefit for the buyers – they could get a condo at a lower mortgage rate.
And when the market gets flooded with the COVID-19 vaccine, people would return to cities and the prices of condos would start peaking up.
Summarizing the effects of the lockdown
Pros of buying a condo during the lockdown
- Fewer buyers, more sellers (buyer’s market)
- Condo prices will boom as seen previously this year
- Low-interest rates
Cons of buying a condo during the lockdown
- Cannot physically inspect the property
- Low rentals (but only for a little)
The decision to buy a condo in Toronto
Being the largest city in the country, people cannot turn their faces away from this city for long. They would have to return to their city. And so will the new immigrants. This would result in the hype in the real estate sector, including the rental properties.
And once everything starts turning back to normality, the interest rates might also go up, reducing the buying power of citizens. This means that it could get tough for people to buy a condo later. While those who consider buying a condo in Toronto during the lockdown might enjoy some benefits in the long term.