“Should I buy a condo or a house?” It is a question I am asked frequently. The question can be answered by two major considerations, finances and lifestyle.
New mortgage regulations set by the Office of the Superintendent of Financial Institutions Canada, have become a deciding factor in the financial decisions of home buyers. Canada’s new minimum qualifying rate for uninsured mortgages has reduced purchasing power. Home buyers may not be able to afford the same home they could afford last year.
The stress test was developed to help protect home buyers in the event that mortgage rates rise and they are hit with other unexpected financial demands.
Based on square footage, condos are usually less expensive than houses. The cost of a condo is also effected by the age and location. The prices for condos are increasing faster than houses right now.
Maintenance expenses can be less for a condo than a house. It’s easier to budget for fees that are set as monthly costs. However, if assessments are made for a new roof, windows, or serious repairs, condo fees can be uncomfortably high.
Deciding which is best for you will depend on the lifestyle you desire. Do you need privacy or are you comfortable with others in your common space? Are you able to mow the lawn, care for the garden, shovel snow and maintain the exterior of a house? Or would you prefer paying Strata fees for a condo to have it all done for you?
People who choose to live in condos generally like to live close to their work, shopping and entertainment. Condo buyers are not always young people working towards buying a house in the future. Many empty nesters are downsizing to condos because of the physical and financial demands of owning a house and property.
Condo owners are restricted in what they are allowed to do to personalize their home. They need permission to install new floors or air conditioning, for instance. There are restrictions on how many and what size pets they can have. Those who choose to live in a house may need to commute a longer distance to work in order to live in their desired home.
If purchasing a condo, a resale may be your best buy for several reasons. Older condos (10 years or more), are often more spacious than newer ones. The contingency fund is usually healthier and more robust than in a newer building. Older condos may have fewer amenities than newer condos. Always have your realtor look into the builder and his reputation before purchasing.
If you want custom decor and/or modifications to your home from the beginning, a pre-construction unit may be appealing. It is a fact that pre-construction projects are prone to delays. Completion can be months or even years late.
If you are buying a condo as an investment and intend to rent it out, you could lose months or years of rent payments if the completion is delayed.
Zoning issues and rising construction costs can cause pre-construction projects to be cancelled. If the developer goes bankrupt, purchasers of pre-construction homes are not high on the list of those to be reimbursed.
Before you purchase, check the track record of the developer. Check whether they have finished previous projects on schedule and on budget . Review the developer’s history through the Canadian Legal Information Institute.
Whether purchasing a house or a condo, it will be a major financial decision. Do your research and take advantage of the professional experience of Joan Hansen of HomeLife Benchmark Langley to help you find the ideal fit for you.
Call 604-220-7654 and visit joanhansenteam.ca