Are you looking for a real estate deal?
I am often asked for a real estate deal. I hear a lot from clients, “Find me a deal.” “Can I get a deal in real estate?” I want to break down the numbers because I am sure you see this a lot on social media or the internet…sales are up…average prices are down or whatever the case may be, but it doesn’t break it down into further detail.
The average condo in the downtown core, specifically for condo owners, real estate investors and homeowners, there is an opportunity here. But if you own a condo and in the downtown, West of Yonge, Yonge, Dufferin, Bloor to the lake, the average price is $664,000. On the East side between Yonge to the DVP and then Bloor, down to the lake, the average price is $682,000. Keep in mind, condo fees are around $500 a month. This is equivalent to a $100,000 mortgage payment or mortgage debt.
If you are paying $500 in maintenance fees, it’s like borrowing $100,000. That $682,000 and that $684,000 are now, theoretically speaking $782,000 and $764,000.
With the Fair Housing Plan introduced in April of 2017, prices have softened and this is where I see further opportunity. For example, the semi-detached homes in Corso Italia, St. Clair Avenue West and Dufferin area which is right on the streetcar line connecting you to two subway stops and maybe a half an hour to downtown if you work downtown. The average semi-detached price is $927,000. So that gap is pretty minimal, about $200,000.
If you look at historical data so far, someone owning a condo downtown and is outgrowing their space, say a young family or said real estate investor wanting to shift their investment portfolio, that gap, once you take the condo fees into account ($782,000 and $764,000) is about $200,000. It would actually be less than $200,000 to jump into a low-rise house. This is where that opportunity or deal is for condo owners or real estate investors who are investing in the condo market.
If you look again at Corso Italia, a detached house is averaging just over one million. This is an opportunity once again for those condo owners or real estate investors to get into the freehold market because the prices have softened over time and that again with the strong condo appreciation over the last few years as shrunk that gap significantly.
From a historical perspective, this is the reason why I am not a big fan of average numbers and you what’s happening in the GTA or even Toronto because trying to lose such a large market if you look at it from one side to another and from top to bottom.
There is opportunity whether you’re an investor or a homeowner and the key is to break down those numbers and look at specific neighborhoods and pockets to analyze it and see what makes sense.