The City Building Institute released an interesting paper this week concluding that developers aren’t building enough family-sized condos to keep up with the future needs of GTA condo buyers. The paper highlights what it calls the “affordability gap” between the average selling price of single-family homes and condos.
Homebuyers have rushed to take advantage of big discounts on condos as the overall housing market has recovered since the COVID -19 pandemic began. Condo make up only a small portion of the overall Singapore housing market, but in certain areas, including densely populated, expensive cities and resorts, they represent a significant portion of homes for sale.
According to National Association of Realtors (NAR), more than 5 million single-family homes changed hands last year, while condos and co-ops accounted for 577,000 sales. According to NAR, the median price for existing homes in January 2018 was $241,700, and News reported that the median price for existing condos in the same month was $231,600. However, the median prices for existing single-family homes were $314,300 and for condos $272,200, according to December 2020 NARS data.
While homeowners are always busy mowing their lawns, painting the house, seldom trimming hedges, cleaning gutters, trimming trees, raking leaves and shoveling snow, many condo owners are busy hanging out by the pool, taking weekend getaways and relaxing at home. The exterior of the condo is owned and maintained by the homeowners association (HOA).
Condo owners pay a monthly fee from the Homeowners Association (HOA) that is higher than city condo owners, but they also cover exterior maintenance. Condominiums offer the most practical approach to home ownership and are indistinguishable from rental housing. Condominiums are less expensive than townhomes because they come with an outdoor lot that is considered common area.
The pros and cons of each option depend on your personal finances and stage of life. Single-family homes offer owners the most freedom when it comes to improving the structure and the land that goes with it, but they usually lack many amenities. Prices are lower than owner-occupied homes, and condos are more affordable in terms of location and maintenance.
In large cities and near the beach, condos are often more affordable than comparable homes, making them less intimidating for first-time homeowners. In some cities, owning a condo can be cheaper than renting an apartment or buying a townhouse. While rents are rising in many areas, owning a condo can be much cheaper than renting in the long run.
When you are lucky to own a condo, your homeowners insurance policy must cover the inside of your home, and your monthly HOA fee helps insure the complex you are in. This means that your rates are cheaper than the insurance you need to own a home. Townhome and condo owners both pay a monthly HOA fee, but it’s usually higher.
Perhaps the most important additional cost associated with owning a condo is the homeowners association fee, also known as an HOA fee. This is a regular fee that you pay to cover expenses such as maintaining the common areas of your condo, snow removal services for your building, and lawn care. In some condominiums, HOA fees also cover the cost of exterior maintenance and insurance for expensive things like roofs, elevators, parking garages, trash and snow removal.
Condominium association fees, also called HOA fees, cover municipal services like garbage collection, water and sewer. Owning a condo or townhome can reduce maintenance and utility costs, but first-time homebuyers should consider condo and townhome fees when calculating their monthly bills. When deciding whether you can afford a condo or townhome, consider HOA fees to provide some parts of the wiggle room in your budget, as well as special assessment fees.
Phil Evans, a buyer specialist at Keller Williams Realty, found that condos in San Francisco cost about $100,000 less than single-family homes. To get a fair cost comparison, consider the amount of condo association fees up front and add them to the total cost of the house or condo.
Condominiums and townhomes have long-term financial benefits. The combination of common renovation and maintenance costs and lower utility costs makes living in a condo or townhome easy and affordable for buyers who don’t want or can’t bear the full maintenance burden of a single-family home. Cost-conscious first-time home buyers can save money by living in condos or townhomes compared to the cost of living in a single-family home.
Price of Singapore condo to increase
When we control for the size differences between apartments, duplexes and condominiums, we find an interesting paradox in the GTA’s “real estate market”: it is much more expensive to buy a house than a condo. Downtown condos cost more than those in the suburbs, and larger condos cost much more than smaller units. But condos, contrary to popular belief, cost less than townhomes and are comparable in price to apartments.
In Maple, a neighborhood in Vaughan, there are apartments and condos. Homebuyers debate whether apartments, condos or townhomes are the best of both worlds. Townhomes have small patios and decks and are cheaper to buy than detached homes.
All of these factors make condos a great starter home, but the condo lifestyle is not for everyone. If you dream to become a homeowner and are curious about buying a condo instead of a house, this is a point to consider. There are a lot of units for sale in condo – neighborhoods and it can take more than a year or more to sell your unit.
In part because apartments are smaller than houses, condo rents in most markets are much lower than typical home prices. Condo residents don’t have to pay the $300 a month for condos or the $7,000 to replace the roof on the house.
With a single family home, the HOA is a maintenance obligation for the homeowner. Maintenance costs are higher for condos in the HOA than for a single family home in the HOA. For townhomes, the HOA must maintain the exterior of the building and the land surrounding the building, which increases maintenance costs.