Strata fees a continuing headache for buyers
A prominent factor hindering townhouse sales at present, according to Vancouver broker Vincent Tong (pictured top) of DLC Clear Trust Mortgages, is sky-high strata fees – which are often so prohibitive that buyers overlook that segment of the market entirely.
Those fees are mandatory contributions made by owners in a strata corporation, covering the costs of managing shared spaces and facilities. But the payments can vary significantly from property to property depending on a range of factors, and Tong said they’re an increasingly large impediment to buyers.
“We do have a lot of buyers in the small entry-level condo market, around the $500,000 to $600,000 purchase price range,” he told Canadian Mortgage Professional. “But we’re also seeing a lot of activity in the single-family space, the multiplex space – $1.6 million to $2 million. There are a lot of people looking to jump into that phase and kind of skip out on the townhome phase.
Toronto condo prices hit 4-year lows, down 21% since 2022. Ownright’s Joel Fox says valuations still don’t match incomes—suggesting more declines ahead.
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“I think strata fees are weighing down on a lot of individuals. It’s a really big consideration because of the amount in strata costs due to insurance, due to additional claims that we see in stratas nowadays [including] a lot of water damage.”
Attached home sales jumped by 10.5% in August over the same time last year – but the number of buyers remains extremely low by historical standards, and benchmark prices for that property type slid by 3.5% year over year and 1.8% from July.