Square One condos since 2003
Square one market update 2012
SQ one area has gone through a total transformation since 2003 (this was also the year when I got my real estate license). Over these nine years, SQ One has added many new condominium buildings to its pool of residential properties (namely CityGate 1 &2, Ovation 1 &2, No. 1 & 33 City Centre, The Capital Condos, One Park Tower, Grand Ovation, Ultra Ovation, Chicago, Solstice, Onyx, Universal , Elle, Eve, Eden, The Wide Suites, The Tiara, Absolute Towers, Limelight Towers and Parkside Towers). The intensification of Downtown core came into being with the Ontario Growth Plan Act of 2005, in which, government wanted to preserve the green spaces surrounding GTA.
Over these years, condominiums have become very popular due to affordability and the fact that they support rental housing needs of Ontario residents.
How has SQ One condo market performed since 2009?
During the last quarter of 2008, SQ One condo prices took a dip because of the short recession that lasted 5-6 months. As per TREB MLS data, over the period of last three years, our average annual price increase is approximately 7.5%.
Is this average growth applicable to all buildings or models?
No. This price growth may not ring true for some recently completed new builder condominium projects and resale condos above $350K price range.
This is because new builders base their properties on their own analysis, land cost, future projections etc. And not all builders are equal when it comes to pricing, quality of product, location, amenities, after sales service etc.
SQ One condominiums that are more expensive in price have lesser demand. And obviously, lesser the demand, slower the price growth. These condos become less attractive buys for investors and first time buyers, for obvious reasons. Also the price gap between a $350K+ condo apartment vs. a condo townhouse or a freehold/semi-detached home, make the latter a better option when it comes to buying a property.
What does future look like?
There are factors that are outside one’s control like economy, interest rates, government lending policies, net immigration, and these are beyond scope of my forecast.
Well no one has a crystal ball, but there is no harm in expressing one’s opinion. In my opinion, within the local SQ One market, there can be different price growths depending on buildings, models, location, builder etc.
I can see trends of condos becoming an increasingly popular choice for first time buyers and renters. With the new mortgage rules (restricting less than 20% down payment buyers to stick with 25 year amortization), a first time buyer with a household income of $60,000, 5% down payment and 3% interest rate can look forward to a mortgage approval $260K approximately for a condominium or $300K for a freehold property. What this means is condominium apartments that are priced between $240K – $260K will see maximum appreciation because of increased demand from first time buyers.
With no decent freehold home being available in the $300K range, first time buyers or renters will be forced to look outside Mississauga, areas which are less expensive, namely Brampton or Milton. This also relates into maximum price appreciation for condominiums and freehold properties in the above cities that are between $300K – $350K price range.
Every year, I move some renters from Square One condos into starter townhomes/freehold properties in Mississauga or Milton and I can see that this trend will continue to grow.
What about renters?
Many renters with household incomes of less than $60K and with no savings will continue to rent. This will make renting more popular (good news for condominium investors) and sustain demand for condominiums. This will further relate into a healthy rental market at SQ One. By the way, as per the last TREB’s condominium report, Mississauga enjoys the lowest vacancy rate of 0.3%, which to me means a shortage of rental units.
New builder condo prices is good news for resale
Soon we will have new inventory hitting the market from Limelight Towers this year, followed with Parkside Tower 1 (Investors, let me know if you need to avail of my renting services). This new inventory is going to help pull up the resale prices of similar units at other SQ One buildings.
The new buildings have the maximum number of investor owned units (in my opinion more than 60% – 70% are investor owned units) and over time this ratio decreases, as first time buyers move in and investors move out after selling their units in 1 to 3 years.
Tip for new condo buildings
For new buildings it is very important not to overlook any builder’s deficiencies and they should be addressed immediately without any delay, in the first year of handing over. There are many examples that I can quote of where residents have suffered because of overlooking the above steps.
Pride of ownership
The residents of the building including tenants and owners have many responsibilities in a condominium. It is really important to elect a competent Board who can get actively involved to oversee day to day management of the building. In my opinion, only those who are passionate to make their building a better place to live in should be applying to be elected as Board members in the first place. People with background in accounting, engineering, social activities etc. should come forward to participate. Well managed buildings relate into better real estate prices.
What differentiates one building from another?
Every building at SQ One can be differentiated from another by its unique features. Some are well respected for activities (recreational), others are known for good architecture, friendly and cordial staff, amenities, appearance of the lobby etc. For example, CityGate1 and 2 are known for the unique shuttle bus offering a free ride to Cooksville GO.
The Capitals, Chicago and One Park Tower condos are known for their full time recreation coordinators and fitness programs that keep residents actively involved. Many such buildings offer special movie nights catering different age groups or plan picnics, running groups, cooking classes etc.
Local real estate professionals understand these salient features that different buildings offer and this helps potential buyers to get drawn towards a particular building.
Local experience pays!
Call me for a free home evaluation and free home staging services when you sell your home with me.
To attend one of my home buyer sessions, call me at 905-339-5111.