Pros and condos

Widowed after 30 years of marriage, May Anderson, of Calgary, was left in 1992 with a 1,500 sq. ft. home with four bedrooms, a two-car garage – and a heart full of memories.

With her two children long gone, it soon became obvious it was time to say goodbye to the house she and her husband had bought years before.

No point at age 69, she figured, in moving from one home with all its responsibilities to another with just as many concerns. And, like so many empty nesters, she found a 1,000 sq. ft. condominium that gave her a chance to live the lifestyle she felt would best suit her needs.

She wasn’t alone then in making that decision, and is even less so today. Market analysts say empty nesters who want a mix of home life and travel – who once accounted for 20 per cent of all condo subscribers – now make up approximately 40 per cent of today’s condo-buying market.

"They’re absolutely the only way to go," Anderson enthuses. "You retain your independence but don’t have the concerns about maintaining the place. And if you want to travel, you can take off with a degree of confidence that the dwelling, if it’s in a multi-unit building such as ours, is safe ansecure."

In fact, Anderson has since remarried and moved with her new spouse into a slightly larger duplex condo.

And they’re not alone. Ted and Edith Holden of Toronto fit the same mould. After 20 years in the same home, the Holdens felt it was time for a change. Not only was the old neighbourhood starting to pale, when they visited the attic one day, they found a new roof was needed.

That and the fact a few other repairs were in order, persuaded the 70-year-old couple they could upgrade to a newer home for what they would spend fixing up the old place.

And so started the hunt that wound up with the former air force couple getting a taste of condominium living that – with one or two exceptions ("sometimes we yearn for our large garden") – they wouldn’t trade today for anything. They didn’t initially go in search of a condo. But as things turned out, their agent knew of a condo townhouse that was soon to hit the market. "We looked at it once and never looked back," says Edith.

It was made to order. Not only was the monthly management fee less than it would have cost to spread the expense of a new roof on the old place over five years, their new ravine neighbours included cardinals and finches, blue jays and woodpeckers and, in recent months – as if to make up for their $165-a-month maintenance fee (a fee kept low because the Holdens and the 20 other owners in the complex don’t pay a consultant to manage their common investment) – a family of foxes and a pair of deer have joined the ravine neighbourhood.

Most people move into a condo for one of two reasons. The first is the appeal of carefree living – not having to worry about installing a new chimney flue or repairing a leaky basement down the road. A monthly maintenance fee of $200 to $250 (the going rate for a townhouse in Toronto) covers all landscaping, snow shovelling and a host of other tasks that befall homeowners.

The other attraction is price. Because dozens of apartments or townhouses can be accommodated on a plot of land not much larger than what would be needed for two or three individual homes, the savings can be substantial.

But those are only some of the reasons. Frank Clayton, Canada’s leading housing analyst and president of the Toronto-based Clayton Research Associates, says many seniors move from a more expensive single-detached home to create a new source of funds they can bank or invest. "Another reason is social contact. If they choose the right place, they’ll find themselves in a building or complex where their neighbours are close to the same age and share many of their interests."

Condo living isn’t all peaches and honey, however. As author Douglas A. Gray, a recently-retired Vancouver lawyer, notes in Condo Buying Made Easy, real estate appreciation generally isn’t as high for condos as for single-family dwellings.

"There also may be a loss of choice, such as restrictions prohibiting pets or subletting," he says. "Also, people living closer together create the potential for problems that include the five ‘p’s: pets, parking, personality, parties and people."

Don’t forget, either, that there’s no escaping local property taxes or the cost of insuring the interior of your unit.

Lionel Needleman, an economics professor at the University of Waterloo, suggested in his 1989 book Buy, Rent, Sell, that anyone interested in condos as an investment should look first at townhouses over apartments. "Usually," he said, "townhouses are cheaper to purchase and have lower maintenance fees. Owners of apartment units have to pay for the extra costs of building and maintaining such facilities as elevators, underground garages and corridors. These units may bring in more rent than townhouses, but rarely enough more to compensate for their higher operating costs."

All in all, however, Canadian developers seem to be increasingly catering to the condo market – particularly in high-cost cities such as Vancouver and Toronto, where their most obvious attraction is affordability and, often, a terrific view.

Figures from Canada Mortgage and Housing Corporation (CMHC) in 1997 showed Vancouver starts and completions making up more than half of the national total – hardly surprising in a city where the cost of single-detached homes is beyond the reach of most buyers. Toronto starts rose 40 per cent in 1997 over the previous year and Calgary starts were up a whopping 105 per cent. But that was before 1998 studies revealed at least half of 800 large Vancouver condominiums built over the last decade had serious leaks that will cost more than $1 billion to repair and Toronto developers realized they had committed themselves to more units in 1998 and 1999 than the market can absorb.

In Vancouver, the leaky condos have resulted in a market for developers that’s damp – both literally and figuratively. Prices are down, as is new construction.

But while the cloud that leaky units has cast over the Vancouver market, combined with overbuilding in Toronto, may be bad news for builders, it would seem to be just the opposite for new buyers. Clayton Research Associates suggests that condo sales now constitute more than 27 per cent of all housing sales in Toronto – up from 24 per cent in 1991. In Calgary, condo sales have grown over the same period to 19.4 per cent from 11.2 per cent. And an estimate for Vancouver suggests condo sales now make up 48 per cent of all home sales – up from 33.7 per cent in 1991.

One final interesting note on condo trends in Canada: Back in 1990, half of all Canadian condo units were townhouses and the other half apartments. That may still be the case. But according to re-sale numbers from various large-city real estate boards, apartments today are being traded twice as quickly today as townhouses. In Vancouver, that ratio understated the fact. Of the estimated 48 per cent of all home sales that were made up of condos, 31 per cent – or almost 65 per cent of all condo sales – were of the apartment type.