The Condominium Conundrum
I don't know what it's like where you live, but today in early 2012 in the Toronto area, it seems the condominium or condo craze is at its peak.
While driving around downtown, or to the north, east or west of the city, you'll see cranes raising new condos all over the place and dozens of sites surrounded by hoardings, where planned condo construction has not yet begun.
Now let me be clear. I am not a real estate agent and I don't sell condos. I am also not opposed to the idea of buying a condo. It seems to me that buying a condo might be a viable option for renters who dream of owning their own home. It sure seems to be a better option than taking on a monster mortgage to buy a traditional home that is way out of affordable range.
But condos are not like houses where you own a piece of land. As a result the old maxim that “they aren't making any more real estate” does not apply to condos. They are making more of them, in some areas many more. And that makes the decision to buy more difficult because you could have a lot more competition when it comes time to sell yours.
The advantage of a house on a plot of land is that the land itself has value—in some cases, quite a bit of value. There are currently small bungalows on good-size lots in north Toronto that are worth in excess of half a million dollars. The buyers are not interested in the house—they want the lots. The first thing they usually do, in fact, is tear down the existing house and then build ...