Affordablity top reason to buy

More people are seeing condominiums as an attractive investment opportunity than was the case a year ago, according to a survey released Monday.

TD Canada Trust said 44 per cent of respondents in a survey of urban Canadians said conditions had improved over the last year with regard to the prospects of buying a condo for investment purposes. That was up from 21 per cent in a similar survey done last year.

When it comes to the top reasons for buying a condo, Vancouverites' responses differed from those of residents elsewhere in Canada.

The top reason most Canadians would consider buying a condo is that condos require less maintenance than houses (39 per cent), followed by the fact that condos are more affordable than houses (21 per cent.)

But in Vancouver, where housing costs have traditionally been high, 35 per cent of respondents cited affordability as the top reason for a condo purchase.

Less maintenance (27 per cent) and approaching retirement (19 per cent) rounded out the top three reasons Vancouver residents gave for purchasing a condo.

"In Vancouver, it's mostly around affordability and that's the primary reason they buy a condo," Joan Dal Bianco, the bank's vice-president of real estate secured lending, said in an interview. "Vancouverites are also the most optimistic about the market."

On the investment issue, the bank said lower prices and mortgage rates are the main reason people are being drawn to condos as a way to make money over the longer term.

"This is a good time to explore a condo purchase given that mortgage rates are very attractive right now and many condos have dropped significantly in price," Dal Bianco said in a statement

The TD Canada Trust Condo Poll also revealed that 43 per cent of Canadians (44 per cent in Vancouver) are willing to consider a joint purchase with a friend or relative to make the condo purchase possible.

Dal Bianco noted that buying a condo with a friend or relative is increasingly an option, although there are potential pitfalls.

"It's a way to get into the market [and] we found that in Vancouver, more than the average, two people are willing to buy together.

Dal Bianco recommended dual purchasers draw up an agreement in advance. "It's the lender who defines whether two people can buy together. And if you go in together, the lender will look at both credit ratings."

The survey also found that Vancouver residents are more willing to raise a family in a condo, while residents of Montreal and Halifax are least likely to raise a family in a condo.

The top reasons why Vancouverites would not consider buying a condominium: Lack of parking (76 per cent), insufficient security (71 per cent), lack of energy-efficient features (53 per cent) and restrictions on pets (53 per cent).

When it comes to costs, most of those living in Vancouver (56 per cent) would spend from $200,000 up to $400,000 for a two-bedroom condo, while 20 per cent of those polled in Vancouver would consider paying $400,000 up to $600,000 for a two-bedroom condo. As well, 51 per cent of Vancouverites polled would pay from $200 up to $400 in monthly condominium fees.

Vancouverites are also the most optimistic that the current market conditions are better than a year ago for buying a condo for investment purposes (54 per cent versus 44 per cent nationally).

The survey, done by Angus Reid Strategies, involved 200 respondents in each of the cities or surrounding areas of Vancouver, Calgary, Toronto, Montreal and Halifax between March 30 and April 7.

("Vancouver residents cite affordability as top reason for buying condos" prepared by Brian Morton/Vancouver Sun)