Real Estate

Buying a Downtown Toronto Condo: What You Need to Know

Downtown Toronto condos are always in high demand and can be sold at a premium price with the help of an experienced team of condo specialists. If you are interested in buying or selling a condo in downtown Toronto, remember that these condos are particularly attractive to working professionals, executives and real estate investors.

The price of a premier resale condo in downtown Toronto ranges from $700 to $800 per square foot (resale condos). For a pre-construction luxury condominium in downtown Toronto, the price per square foot ranges from $850 to $1,000 per square foot, and is even higher for a super-luxury building that includes projects like the Four Seasons Residences, One Bloor Street and The Trump Tower. Condominiums in downtown Toronto, near the TTC subway stations on the University Line (Yonge-University line), are also very popular.

Toronto offers a safe haven for condo buyers looking to invest their money in a stable environment. There are lower interest rates, low unemployment rates, and strong economic growth in Toronto. However, before you buy a downtown Toronto condo, there are many things you need to know.

Downtown Toronto Condominiums – Prices in 2018

Everywhere you look in downtown Toronto, there are construction cranes and constant development, but finding a condo to call home is becoming increasingly difficult and expensive for a legion of desperate renters.

Urbanation, a real estate company, recently compiled data to show that rental costs have skyrocketed along with sudden supply shortages. According to Urbanation’s annual report, monthly condo rent in the Greater Toronto Area rose 9 percent in the fourth quarter to an average price of $2,166. The median monthly price was even higher in downtown Toronto at $2,392. But it also appears that people are renting condos longer-term, and a host of construction projects remain incomplete, leaving fewer units available for renters.

Key Findings from Urbanation

Rent per square foot has increased 5.8% to $2.93, marking a slower growth rate than previous quarters due to changes in composition from a shift in activity to the suburbs. The number of leased units in the fourth quarter fell 11 percent year over year, while listings fell 16 percent. Supply has been affected by low condo completions and reduced rental turnover rates. The average time between lease transactions has increased to a maximum of 23 months. The ratio of units leased through businesses versus individuals was 10 percent in the fourth quarter. Rents for available purpose-built units built since 2005 grew 10.8%, with 0.3% vacancy, and rental development rose to a two-decade high with 7,184 units under construction. With an 11 percent increase, the median cost of a studio condo is now $1,665. Renting a one-bedroom condo in Toronto would cost $1,847. Rent increases by $644 for a two-bedroom apartment and increases even more for a three-bedroom apartment, which costs $3,663.

“Leasing activity declined in 2017 to 8.3 percent, the lowest level of condo rental billing since 2013,” Urbanation said. “The lower condo rental supply in 2017 was the result of a higher proportion of units resold as investors took advantage of rapidly rising condo prices, as well as a decline in new project completions to a low of four years.

“At the same time, high rent levels and new rent control regulations are causing tenants to move in less often, further reducing available supply.”

But Urbanation believes that these drastic supply problems will only push developers to continue building new developments at a faster rate.

“The continued strong growth in rentals throughout 2017 was simply the result of rental demand fundamentals far outpacing supply,” said Shaun Hildebrand, senior vice president at Urbanation.

“This has increased the confidence of developers to add more units to the pipeline, a trend that will need to continue to meet future housing needs for the GTA.”

How to save on renting a condo in downtown Toronto

  1. It sounds obvious, but the number one way to save on downtown Toronto condo rentals is to know where you want to live. Toronto offers a wide range of neighborhoods, each with its own unique features and drawbacks, especially when it comes to affordability. Knowing which Toronto neighborhood you like and what you could afford to live in will save you time!

  2. Given the competition caused by the high demand for condominium space, calling ahead and having a quick chat with the realtor can create a useful connection. Being flexible with your availability for viewing times is also beneficial for general search.

  3. Be completely honest with your rental agent. Tell them the real reason why you decided to leave your last place or the details of your income. When it comes to dealing with the real estate agent or landlord, they are your representative, so the more they know, the better they can present a clear picture of you as a tenant.

  4. An ideal minimum credit score is 680. If your credit score or employment status is likely to hurt your rental application, see if there is someone who can sign for you, like a parent/guardian or friend. If a co-signer isn’t an option, sometimes offering a few months’ rent in advance can help the landlord feel confident in your ability to cover the cost of rent.

  5. As a general rule of thumb, the ratio of monthly rent to monthly income should ideally not exceed 33 percent.

  6. Applicants with long-term employment with a company are given preference over newly employed individuals.

  7. Owners prefer single occupants for a one-bedroom condo and no more than two occupants for a two-bedroom condo, as it is commonly believed that more tenants will cause more wear and tear.

  8. Most landlords have a no pet rule for their units, and this could be a deal breaker if tenants decide to reveal their pets. Although the Residential Tenancy Law overrides the “no pets” provision, a landlord can reject an offer if a tenant mentions his pet.

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