Re: Condo "craze" continues
:eek
The sky is falling!!!!! ... not.
A lot of people may still be remembering when the sky actually did fall, in the Toronto real estate market, in the early 1990s. It affected all forms of housing. Conditions now are much different.
It would be interesting to sit down and do a real statistical analysis of price trends for condos vs. detached houses and see how much each category has appreciated. (It wouldn't be easy, there would be a number of variables.) My own impression after watching the market for many years is that location is a much more important variable than type of physical construction. Well-located condos, as with well-located houses, will hold their value. Some of those which are in less desirable locations, away from downtown, transit, or other good amenities, will accordingly rise less, or perhaps not at all.
With condos, there is admittedly the additional variable of how well the specific building is maintained. There are several examples which can be cited of short-sighted condo directors who took as their priority keeping the monthly fees down. When the underground garage needed $300,000 worth of repairs, and the reserve fund contained only $100,000, the owners got the dreaded "special assessment". Hopefully some changes to the Condominium Act a few years ago will have addressed this to a great extent. But it remains true that condo owners have less direct control over their environment and need to take an interest in how their project is being run.
The good market fundamentals are still in place (strong and diversified economy, historically low interest rates, lack of inflationary pressures, continuing immigration, etc.) These have been well documented recently. The sky definitely is not falling on us, and condo owners can sleep soundly at night.
