Why Small Condos are the Hottest in Toronto Real Estate Right Now

08 May 2018

Why are small condos the hottest segment of our Toronto real estate market today? Prices are now at $1000 per sq.ft. At the same time, bigger units can be had for about $800 per sq.ft. In the long term, these bigger condo units will become the most in demand units, but not right now.

The problem has to do with the new rules for mortgage financing. People still want to own, now and tomorrow. And they ask us, "what can I get for $500,000 to $1,000,000?" At the $500,000 mark, you can buy a 500 sq.ft.-600 sq.ft. condo. And, no one wants to go over 1 million dollars in purchase price. For conventional mortgage lenders, they will lend up to 80% of the first million dollars. Go over one million dollars and they're only going to lend 50% over this amount.

For example, if you want to buy a property for 2 million dollars, you need a minimum of $700,000 down payment. There are not many people sitting on $700,000 cash.

small condos

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