Square One condo market 2014
Each year I serve several real estate investors in the Mississauga Square One area. At the end of the year I analyze market trends in different ways to bring you the pulse of the Square One condo market. In 2013, I ended up serving over 50 real estate investors in Mississauga, as per my Re/Max Office transactions breakdown. This number is about 50% more than the number of investors I worked with in 2012.
The reason for this increase in number of renters can be attributed to the fear amongst first time buyers who have been sitting on the sidelines. They opted to play safe and rent rather than step out and buy. The media played their part in adding fuel to the fire. They presented a gloomy picture of the real estate crash right from the beginning of 2013. I still remember the front cover of Maclean’s January 2013 edition where they predicted the Canadian real estate market crash.
In reality, nothing like this happened.
Economists play a crucial role in analyzing numbers but tend to go off track on predictions sometimes. I wish we all had a crystal ball to predict the future but that’s not always feasible. The government further tightened the lending conditions in 2013 which went on to play a big role in curbing investors from investing in multiple properties.
What helped the real estate market to stand firm and not crash was the low interest rates in the Canadian economy. This year I see a lot of those renters coming out of hibernation and opting to buy instead. This should not only accelerate Mississauga real estate sales but will also help to boost average prices.
Moving from Mississauga condos to homes
I have also moved families from older condos to freehold homes in Mississauga when they felt the need for spacious home. These families have bigger children who grew up in the Condo culture.
Now that they have grown up, parents find their lifestyle changing and feel the need for more space. Their children have friends come over to their home. Parents feel the need to have multiple levels for their own private space and there is often the need for a backyard for extra space as well.
With the change in lifestyle comes the need for a change in homes. These families then leave their condos and move on to a bigger home.
Renovating condos for faster sales
There is also a trend in the market for refurbishing older Square One condos with new upgrades and updates to increase their value. Within the same condo building, it’s not surprising to see a considerable price difference between an older, not renovated and not updated condo. A well updated and upgraded condo can go up in value by 30% to 40%. Often when I am attending listing presentations, I find home sellers confused with the price difference of condos units in their buildings.
They see condos similar to theirs on websites priced higher and question me about the difference. This is how I explain:
First time buyers have a minimum down payment to purchase their first homes. In most cases they come up with 5% to 10% down payment. For an average condominium in an older building in Mississauga Square One, the prices range anywhere between $235,000 to $250,000.
Their savings of $15,000 to $25,000 dollars is just about enough to put their foot in to the housing market.
Most of the time, these first time buyers don’t have the budget for home upgrades. These buyers prefer to invest in upgraded condos which are 25% to 30 % more expensive than older condos.
For example, if an upgraded condo is expensive by $30,000 from its peers, the additional 5% down payment comes to only $1,500 dollars. That’s one reason why updated and upgraded condos are more in demand than the ones which are not.
Those condos take a longer time to sell or worse, don’t sell if they are not priced right. If you wish to upgrade your unit to sell, you don’t have to make it an extravagant affair. I offer renovating tips to all my sellers.
Freehold homes in Mississauga have great potential for growth
Lastly, I had clients who felt the need to upgrade from their current freehold properties to a larger freehold property in Mississauga itself. I also had investors who showed interest in larger Mississauga freehold properties.
Both these type of clients strongly feel that our Mississauga freehold market is in for an exceptional price growth. I full agree with them. Personally, I see our freehold property markets to grow at a faster pace than our condo apartment market.
Having said that, please note that price appreciation is affected by affordability so a home worth 500,000 dollars will grow at a faster pace than a home worth 700,000 within the same type of property ( see data below: semis have performed better than detached homes in the last one year).
Price gap of a 1,000 sq. ft apartment in Mississauga and a three bedroom starter townhouse is less. Which means a starter townhouse condominium townhouse will grow faster than a condominium apartment in Mississauga, unlike downtown Toronto.
Speak with me and get guidance at minimum cost for maximum returns.
|Mississauga Property||Median Price, Dec 2012||Median Price, Dec 2013||% Growth|
* includes stacked townhouses