Buying a Condo in Downtown Toronto – What You Should Know4 min read
Condos in downtown Toronto are always in high demand and can be sold for top value with the help of an experienced condo specialist team. If you are interested in buying or selling a downtown Toronto condo, remember that these condos are particularly attractive to working professionals, executives and real estate investors.
The price for a prime resale condo in downtown Toronto ranges from $700 – $800 per square feet (resale condominiums). For a pre-construction, luxury condo in downtown Toronto, the price per square feet is between $850 to $1,000 per square foot, and is even higher for a super luxury building which includes projects such as the Four Seasons residences, One Bloor Street and The Trump Tower. Downtown Toronto condos near the University Line TTC Subway stations (Yonge-University Line) are very popular as well.
Toronto offers a safe haven to condominium buyers who seek 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 condo in downtown Toronto there is a lot that you should know.
Downtown Toronto Condos – 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 more difficult, and costly, for a legion of desperate renters.
Urbanation, a real estate firm, recently compiled data to show rental costs have spiked in tandem with a sudden supply shortage. According to Urbanation’s annual report, monthly condo rent in the Greater Toronto Area has risen 9 per cent in the fourth quarter to an average price of $2,166. The average monthly price was even steeper in downtown Toronto at $2,392. But it also appears that people are renting condos on a more long-term basis, and a large number of construction projects remain incomplete, leaving fewer units available to renters.
Urbanation’s Key Findings
Per-square-foot rent has increased by 5.8 per cent to $2.93, marking a slower rate of growth than previous quarters due to compositional changes from a shift in activity to the suburbs. The number of units leased in the fourth quarter fell 11 per cent annually as listings dropped 16 per cent. Supply has been weighed down by low condo completions and reduced rental turnover rates. The average length of time between lease transactions has increased to a high of 23 months. The share of units leased through companies as opposed to individuals was 10 per cent in the fourth quarter. Rents for available purpose-built units built since 2005 grew 10.8 per cent, with vacancy of 0.3 per cent, and rental development increased to a two-decade high of 7,184 units under construction. With an 11 per cent increase, the average cost for a studio condo is now $1,665. To rent a one-bedroom condo in Toronto would cost $1,847. Rent increases by $644 for a two-bedroom apartment and increases further for a three-bedroom apartment, which costs $3,663.
“Lease activity declined in 2017 to 8.3 per cent, the lowest level of condo rental turnover since 2013,” Urbanation said. “Lower condo rental supply in 2017 was the result of an increased share of units resold as investors took advantage of quickly rising condo prices, as well as a decline in new project completions to a four-year low.
“At the same time, high rent levels and new rent control regulations are leading tenants to move less often, further reducing available supply.”
But Urbanation believes these drastic supply issues will only push developers to continue building new developments at a faster pace.
“Persistently strong rent growth throughout 2017 was simply the result of demand fundamentals for renting far outweighing supply” said Shaun Hildebrand, Urbanation’s senior vice president.
“This has raised the confidence of developers to add more units to the pipeline, a trend that will need to continue in order to meet future housing needs for the GTA.”
How to Save on a Condo Rental in Downtown Toronto
- It sounds obvious, but the number one way to save on a condo rental in downtown Toronto is to know where you want to live. Toronto offers a wide range of neighbourhoods, each with its own unique characteristics and drawbacks, especially when it comes to affordability. Knowing which Toronto neighbourhood you like and could afford to live in will save you time!
- Given the competition caused by the high demand for condo space, calling ahead and having a quick chat with the listing agent ahead of time can create a helpful connection. Being flexible with your availability for viewing times is also beneficial to the overall search.
- Be completely honest with your rental agent. Tell them the real reason for why you decided to leave your last place or the details of your income. When it comes to dealing with the listing 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.
- An ideal minimum credit score is 680. If your credit score or your employment status is likely to hurt your rental application, see if there is someone that can cosign for you, like a parent/guardian or a friend. If a cosigner is not an option, sometimes offering a few months’ rent in advance can help give the landlord confidence in your ability to carry the cost of rental.
- As general rule, the ratio of monthly rent to monthly income should ideally not exceed 33 per cent.
- Applicants with long-term employment at a company are given preference over newly employed people.
- Landlords prefer single occupants for a one-bedroom condo, and no more than two occupants for two-bedroom condos as it is commonly believed that more tenants will cause more wear and tear.
- Most landlords have a no pets rule for their units, and this could be a deal breaker if tenants choose to disclose their pets. Although the Residential Tenancies Act does void a “no pet” provision, a landlord can refuse an offer if a tenant mentions their pet.