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Vertical Developments Boom But Traditional Homes Aren’t Taking It Lying Down
A lot of things can change in a month, a few months, or within a year. Especially when it comes to the real estate market, prices can easily go up or down depending on the ever-changing supply and demand for homes across cities.
This is why you should work with a professional mortgage broker if you are in the market for a home. He can get you the best financing deal available in your area and help you process documents and payments to boot.
Toronto for example, experienced a boom in the demand for condominiums and apartments. With new developments and a growing new-home, first-time buyer market, prices for units across multiple infrastructures rose past 14 percent. In the same way, the number of new units purchased also rose by a similar amount.
Aside from the relatively lower costs of these units, thanks to a high density of residents per building, the concept of having a more manageable space has truly been quite appealing to the younger set. Inner city and prime building locations also added to the appeal of these condominiums and apartments, where things are more accessible within one’s residential radius.
As new builders entered the market, new developments rose and multiple units were delivered to consumers. And as demand for these residential units rose, so did the average asking prices for these modern dwellings. Imagine a home that carries a per-square-foot cost average exceeding $600.
Financing constraints is one of the reasons that contributed to this as a number of buyers favor more affordable options that will allow them to have money for other things apart from owning a home. There are also some who only have limited monthly budgets that limit what they can realistically spend on a regular mortgage.
But even if there is a rapidly growing market for vertical residential developments, the market for traditional townhouses and detached units remain unfazed. Prices, and demand, have also risen for these residential units with the lowest average percentage increase already exceeding the 32 percent mark.
The growth in value for these detached properties easily surpassed that of condominiums and apartments. This means that there is still a strong market for traditional homes, new or second-hand. There are still those who would like to stay where the communities are less dense and there is actually enough room to move about.
But unlike their vertical counterparts, the supply for these standalone homes is quite low. As developers focus their investments on constructing modern dwellings, only a limited few are left churning traditional homes. Consumers interested in the latter have a few of these new units to choose from plus units available in the reseller market.
So far, the annual decline in available homes are close to reaching 50 percent and the changes in consumer habits, homeowner preferences, modern city planning, and red tape are to blame. In the detached home market alone, the decline in available houses and lots have gone down beyond 90 percent in one year.
