Condos are pretty cute little things; and usually, pretty modern too. These are just two of the features that condo owners or soon-to-be condo owners love about these multi-unit dwellings. But what about the worst feature that comes with every condo unit – the fees? While condo owners obviously don’t love them, a new report by TD Canada Trust shows that for owners, it’s better to live with them than without.
According to the survey, named the TD Canada Trust 2012 Condo Poll, three-quarters of Canadian condo owners say that paying the fees is worth it for condo living and all the perks that come along with it. Across the country, 35% said that they’d pay up to $200 a month in fees, while 44% said that they would pay as much as $400. For those that might have a little more cash flow, 17% of those polled said that they would be comfortable going as high as $800. However, just how much one would be willing to pay seems to have a lot to do with where in the country they live.
Those who have Toronto mortgages on condos are willing to pay the most amount of money in condo fees with 38% of Torontonians saying that they’d pay $400 or more, and 16% would pay more than $600. In Montreal however, condo owners are only willing to pay $200 in fees, and not a penny more.
But just like mortgage payments, condo fees can also go up at any time, depending on the building and the homeowner’s association within it. But if fees do ever increase, 29% of condo owners say that they have already budgeted for an increase, while 34% say that they’d have no problem cutting back in other areas should a fee increase occur. Farhaneh Haque, Director of Mortgage Advice at TD Canada Trust, says, “The possibility of a fee increase can be a little unnerving. While there’s no way to lock in to a monthly fee the way you can with a mortgage, you can prepare for a fee increase by building a buffer into your monthly housing budget, as some Canadians have wisely done. That way if fees go up, it won’t be a major shock to your cash flow.”
So aside from the modern appliances, the great downtown location, and the sheer prettiness of the building, what do condos offer that make the fees so worthwhile to so many? It’s pretty obvious – home ownership. And for those that have come from rental backgrounds, condo ownership seems to feel much more comfortable and familiar to them. 29% of those surveyed said that owning a condo was still cheaper than renting an apartment, while 24% said that fees still felt too much like rent so they are putting aside savings in order to own another home.
On this issue, Haque says that it’s best for those thinking about a condo purchase to speak to a Toronto mortgage broker, as “it’s not just a straight comparison of your monthly rent and utilities to a mortgage payment and condo fees.”
Haque also warns that with the Canadian economy forecasting a drop in condo prices due to a huge supply, you have to determine how long you’re going to be in the condo. If you’re looking to downsize in your retirement years, it could be a very worthwhile investment. If however, you’re looking to build equity while saving for a home, you might find that you don’t get nearly the amount you had hoped for when it comes time to sell.
