Grappling with affordability in the low-rise market and paucity of space in condo apartments, Greater Toronto Area homebuyers are flocking to townhouses in droves.
In 2008, townhouses comprised only a quarter of sales in the low-rise sector, but as of this October, row houses accounted for 42% of low-rise sales.
“Townhouse product fits between apartments and the detached housing market, and we expect to see more demand for that asset,” said Matthew Boukall, VP of product management, data solutions at Altus Group. “When we look across different markets they’re generally flat. In Toronto, the market had a rough start to the year, where we saw sales plummet, but within that detached housing market of single-family homes and row townhouses, the latter accounted for 42%. They grew the low-rise market segment.”
According to Christine Cowern, a sales representative and team lead at Keller Williams Reffered Urban Realty, townhouses are ideal for homebuyers who struggle with affordability but who also resist too much compromise.
“We’ve been telling our clients for years that townhouses are a fantastic compromise between a house and a condo apartment,” she said. “Freehold towns are on the higher end but still cheaper than owning a house, while condo towns are quite a bit cheaper. For someone who is new to the market or owns a condo and wants to move up but can’t afford a house, their go-to should be a townhouse.”
Condo towns make sound investment properties, too.
“Condo towns have maintenance fees but they’re typically cheaper than condo maintenance fees because there’s no pool or a concierge, and it could be half the cost of condo apartment maintenance fees,” said Cowern, adding that freehold towns aren’t sagacious investments.
“It makes the most sense for investors to stick to condo apartments and condo townhouses because with freehold you get into higher purchase points and you won’t attract a higher-paying tenant. You’d need anywhere from the mid-$2,000s to $3,500-plus in rent and that narrows your tenant pool.”
In the GTA, townhouse sales have been highest in Brampton, followed by Milton, Whitby, Vaughan and Oakville.
“We think (row house towns) are going to become much more popular,” said Boukall.
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