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In recent times, condo sales are on the rise if you compare them with traditional housing options. According to research conducted by the National Household Surveys (NHS), condos are immensely popular among those who are below 35 or seniors and retirees. Some of the analysts are of the view that the condo markets in Vancouver and Toronto are overbuilt. However, the surplus is consumed by most of the senior citizens, immigrants, and people who are under 35.

Most of the baby boomers look for this option but not all of them are doing the same. Recent retires still prefer to stay in a good old fashioned house with their families. This convergence of the baby boomers who reached their retirement age after the end of an era where interest rates are at historic low has summed up into fear of housing market impact.

They look to downsize their options to cater to this impact. But not all of them are looking to do so. Some people don’t like to do much after retirement and for such group condos are good. But many retirees prefer to keep themselves busy and for this they need, a garage, a garden, and most importantly a family home to keep them going.

What the numbers say!

As mentioned above, the survey has found that condos are becoming increasingly popular among old and young. According to Statistics Canada, 20% of the condo owners are under 35, which in comparison to 10.5% for other dwellings, is almost double. In addition to that, more than 26% of the condo owners are 65 and above, which is more than 20.7% for other dwellings.

Some people do like to go into a condo after retirement but if they don’t want to maintain their garden and other stuff. These people just like to enjoy a calm place where they can spend the rest of their lives when they are done with their jobs. These older adults have to deal with their children or kids at home. Most of them don’t want all that and they prefer a relaxing life in the end.

Most of the baby boomers outright own a home

As per Phil Soper, the CEO of Royal LePage, baby boomers are the wealthiest of all the retirees up till now. More than 80% of them outright own a home. For this reason, they don’t need any financial assistance for retirement at this point. There are different financial tools such as reverse mortgage which enables people to stay in their house even if they continue to withdraw on capital. This option enables them to stay in their houses for a longer period of time.

The immigration factor

Another significant condo market continuation is from the immigrants. Throughout the country, the market of new homes including single homes and condos is being overdone by building 250,000 additional suits as per the data provided by TD. Now because immigration is strong, the overbuilt units will be easily consumed by the immigrants.

In recent times, the patterns of immigration are changing. However, the trends are shifting towards the areas where there is more overbuilding. These areas include Edmonton, Calgary and a few of the Atlantic Provinces due to high employment opportunities.

Stabilizing house markets

The real estate experts think that the house markets across the country are stabilizing after a few sales bump particularly due to the tighter lending rules in Ottawa. According to a survey, many Canadians are deep in housing debt.

More than 3.3 million homes, which comprise 25%, have spent more than 30% of their income on shelter. These expenses include utility bills, rental payments, condo fees, and property taxes and they exceed the measures of affordability from Canada Mortgage and Housing Corporation (CMHC). The affordability per month was approximately $1260 for those who exceeded the threshold.

This number is $510 more than the estimates of CMHC that those households can afford. The amounts of loans have increased rapidly but the interest rates are low and this makes affordability in control for the households.

The prices are still on the rise

Toronto’s housing market is still climbing. The city’s vacancy rate is at its worst while being at 0.5% (nearing historic low). The average rent of Toronto’s single bedroom apartment is about $2400. Bidding wars concerning rental units are pumping the rent rates even further. Landlords, instead of relisting their properties, are illegally exploiting the tenants by claiming that they want to renovate or permanently move in.

Due to this scenario, people are looking for high-density homes because they stay affordable People also go for a low-maintenance lifestyle. However, the significant reason is that most single-family houses cost fairly more compared to a condo.

Toronto Real Estate Board reports that the home prices in Greater Toronto are up by 7.5% and the average price is $562,523. These prices even go further in downtown Toronto with $674,252 an average. Central Toronto also has the same story to tell and a listing for a condo only last for less than 3 weeks before it becomes a done deal.

The affordability factor

Affordability factor is a primary concern for the two groups that we are talking about here. For people who are under 25 conjuring a large sum of money might be a little difficult and for this reason, they settle with a condo because it is not going to cost a fortune.

Furthermore, there are plenty of errands that these condo projects have to offers and the lifestyle suits a new family. On the other hand, old adults prefer to live in a quiet place with plenty of space of their own. They can also benefit from the non-hectic lifestyle of condominiums. Both these groups consider their financial position before they take their decisions and in these scenarios condos turn out to be a better option.

Final thoughts

Phil Soper says that the buyers can make adjustments to their expectations if they are confident about the monthly payments. They can easily shift to buying a small sized condo that is not going to cost as much as a house. This fact is truly applicable to the people who are under 35 and those who are over 65. For this reason, these two groups contribute heavily when we talk about growth in condo sales.