Canada's Condominium Magazine
A day after its latest report on the state of the housing market in Canada, BMO says that home-buying intentions in Toronto are up “significantly” and that one-third of those buyers will be buying condos. Buyers in other cities, notably Vancouver and Montreal, have become less inclined to buy a condo, but in Toronto, 31 per cent of prospective buyers who intend to buy in the next five years say they will go high rise. That is up 11 points from the last survey in the fall of 2012.
The condo choice is more appealing, apparently, to the older crowd. People over 50 are more likely to buy a condo than those under 50, by a ratio of 30 per cent to 17 per cent. Many of them are likely baby boomers who are downsizing.
But a BMO spokesperson commenting on the findings said that echo boomers who are moving up to their first home are also drawn to the condo option, and for them it’s a matter of affordability. The typical condo in Toronto today requires “just 22 per cent of a median family’s income” to service, making it the obvious choice for many, especially singles.
Affordability in the housing market has improved, according to BMO, the result of income growth and softening prices in some markets, though prices have not softened in the detached home market in Toronto.
The Ontario, and by inclusion the Toronto market, is not as price sensitive as some other areas of the country. It is quite specific, it turns out. While prospective home buyers in Toronto would not be put off at all by a 5 per cent increase in home prices, a 10 per cent rise would send many of them running the other way: intentions to buy would drop by 17 points.
This relative lack of price sensitivity on the lower end in Toronto could be tied to a growing perception of mortgage affordability, the realization that having a mortgage does not necessarily impose undue burdens on home owners. BMO says that the number of mortgage holders who have had to cut their spending and make sacrifices in order to make their mortgage payments has dropped from 55 per cent to 45 per cent since last year.