Condo Townhouses: 3 reasons they are a good choice for homebuyers

If you have been following the real estate market in Richmond Hill and Markham and GTA in general, you would probably notice that the average price of a freehold homes has skyrocketed up to point that it becomes quite unaffordable for young people and even for those who already owns a condo apartment. A condo townhouse can be a great option for these groups and below are the top 3 reasons.

#1 More Affordable than their freehold counterpart

The average resale prices of freehold townhouse in Markham for the month of March 2016 is $734,949 while for condo townhouse it was $542,032, a difference of $192,917. In Richmond Hill the differences between condo vs freehold townhouses prices is $225,212.

Markham Resale Homes Market March 2016

Home Type

Sales

Average Price

Active Listings

Average SP/LP

Average DOM

Condo Townhouse

31

$542,032

36

103.3 %

14

Condo Apt

110

$374,242

254

98.1 %

30

Freehold Townhouse

64

$734,949

46

107.5 %

9

Richmond Hill Resale Homes Market March 2016

Home Type

Sales

Average Price

Active Listings

Average SP/LP

Average DOM

Condo Townhouse

16

$538,544

11

102.2 %

11

Condo Apt

69

$358,635

153

97.8 %

29

Freehold Townhouse

64

$763,756

45

105.8 %

9

#2 The maintenance fees is not as scary as you think

The biggest drawback of a condo townhouse to most people is the maintenance fees, but it might not be as bad as you think. While it is hard to put a value on the extra services you get from the maintenance fees, let’s assume in the following example only water and common element insurance are included in the condo townhouse maintenance fees.

Assume there are 2 homes that you equally love, one is a freehold, another is a condo townhouse. The freehold cost $180,000 more than the condo townhouse (based on the average sale price differences between condo and freehold townhouses in March 2016). Let’s say you qualify for that additional $180,000 in mortgage and mortgage rate is 3%, amortized over 25 years. Each month you will pay $851.84 more in mortgage if you choose the freehold. Over 25 years, this additional $180,000 in mortgage will cost you $75,552.57 in interest. If you own this house for the entire 25 years the additional interest cost, on average, per month will be $251.84. So in this case, as long as the condo fees is somewhere around $251.84 per month, it would be the same cost to you whether you are buying the freehold or the condo. There are other factors affecting this calculation such as an increase or decrease in mortgage rate, how long you hold on to the property and the increase of condo fees, however, this example is just to show that the condo fees is not as bad as you think.

#3 You will still enjoy significant appreciation in property values, if the current trend continues

The graphs below show the price trends of condo apartments, condo townhouses and freehold townhouses in the last 5 years. The rate of price growth for condo townhouses was less than their freehold counterpart but it’s still much better than condo apartments. If you also look at the average time it took to sell a condo townhouses (14 days for Markham and 11 days for Richmond Hill), it is obvious that demands are high for this type of homes.

 

Is your budget for a home between $450,000 and $700,000? Are you frustrated at the limited options you have in the marketplace? Feel free to comment below. Also, contact me and we can explore together if a condo townhouse with low maintenance fees is a good option for your family.

UPDATE: Shortly after this blog post was published, I was honored to be interviewed by Sing Tao Daily regarding this topic. (Sing Tao Daily is one of the most popular Chinese news media in Canada). I was thrilled to discover that the article was actually featured on the front cover on Saturday, May 7th, 2016 and below is the article on page A4.


 

 

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Janis Tsang

Janis Tsang

Sales Representative
CENTURY 21 Atria Realty Inc., Brokerage*
Contact Me

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