The lack of maintenance requirements and a growing interest in the suburbs have first-time homebuyers and empty-nesters alike looking at townhouses closely this year. Interest in townhouses is one of many major real estate market trends to watch in 2021.
Before you begin your home search, here’s everything you need to know about buying a townhouse in 2021.
The two main types of townhouses
If you’re looking for a townhouse, you’re likely to hear the phrases “freehold” and “condominium /strata” frequently during your house hunt. These are the two main types of townhouses, and understanding the differences between them can set you down the right path and save you a lot of time while you search.
When you hear “freehold,” you can think about this kind of property as a detached home that looks like a townhouse. While they have a low-rise townhouse’s physical characteristics, they have a detached home’s traditional legalities. Nothing here is co-owned or co-managed with other nearby owners.
Freehold townhouses typically put you in control of the interior and exterior of your home, giving you the freedom to make changes to your property as you see fit. They usually come with zero condo fees, no risks of special assessments, and more maintenance work for the owners. More on these pros and cons later.
In most of Canada, these kinds of townhouses are referred to as condominium townhouses, except for British Columbia, where the term “strata” is more commonly used. While it can be a little confusing, there are a few critical differences between freeholds and these types of townhouses.
Condominium or strata townhouses typically give you ownership rights to everything inside the unit’s structure, leaving the exterior ownership and maintenance to the condo/strata corporation. This means more fees for owners every year, but also less maintenance work to do on your property. If you’re moving from a detached home where the upkeep proved to be overwhelming, a condo townhouse might just be the perfect fit.
Unlike freeholds, these kinds of townhouses can also come with amenities. Some have gyms, pools, tennis courts, and even spas in their common areas. You’ll be paying for the upkeep, of course, which is something to consider when evaluating properties.
Yes, you can find very affordable detached homes and expensive apartments, but typically, townhouses fall somewhere in between detached homes and condos in terms of average pricing. In general, townhouses offer more space than most apartments while not having as high a price tag as a detached home, making them a great middle-ground for potential buyers. In many cases, since they typically take up less total square footage than a detached house, townhouses can also be found in areas other than just the suburbs, with developments taking shape in city centres across Canada.
If it’s a mix of space, location, and affordability you’re after, a townhouse is a great option to consider.
Besides being an affordable alternative to a detached home, townhouses offer many perks that should be considered when searching for your next home.
One of the significant advantages that townhouse owners often point to is the low maintenance lifestyle of owning a condominium townhouse. If you’re moving from a detached home, the reduction of maintenance work is desirable. You will quickly notice that some of the joys of homeownership, like cleaning your gutters and power-washing your driveway, weren’t joys at all.
Another major perk of buying into a condominium townhouse is the shared amenities. Always consider which of these amenities you’ll use regularly and which you won’t, as you’ll be paying for their upkeep either way. If your townhouse includes access to a shared gym that you’ll use every day, that’s worth taking into account when looking at your budget. The convenience of being within walking distance from some of your most desirable amenities is an incredible bonus that you won’t often find in many detached homes.
Fees and special assessments are the two major expenses to watch out for when owning a townhouse, as they can add up quickly. Condo or strata fees are a monthly fee you’ll need to pay to take care of any maintenance, amenities, and general upkeep. Keep in mind that you do get something for these fees. While you could see extra costs as a negative, it doesn’t have to be viewed this way, especially if you love the lack of maintenance work and use any amenities regularly.
Special assessments can also hurt your pocketbook, and they can come on quite suddenly. Make sure any condo or strata you buy into has a healthy contingency reserve, and read through strata documents to see if any major repairs have been done recently.
Lastly, shared walls and closer outdoor boundaries with your neighbours are to be expected when you opt for a townhouse over a detached home, but that shouldn’t necessarily be a deal-breaker for you. If you’re moving from a traditional condo, you’ll be thrilled to have no footsteps above you, which can be a real nuisance in a wood frame building. End units will only share one wall with a neighbour and are often very desirable in townhome communities.
The market forecast
Royal LePage recently put out their market forecast for 2021, and in it they included projections for condominiums and standard two-storey homes, along with an aggregate estimate forecast for major Canadian cities. While some townhouses would fall under the condominium category and others under the two-storey category, the aggregate forecast would likely be a more accurate estimate for the townhouse market, which is seeing a steady stream of move-up buyers across Canadian cities. The aggregate housing market percentage increase predicted this year by Royal LePage is as follows:
- Greater Vancouver: 9.0%
- Greater Toronto Area: 5.75%
- Calgary: 0.75%
- Edmonton: 1.5%
- Winnipeg: 4.75%
- Regina: 2.75%
Overall, townhouses in 2021 should attract plenty of buyers and help drive some of the hottest real estate markets in Canada even higher. The lifestyle, space, and low maintenance requirements make townhouses an excellent choice for new families and couples looking to downsize.
To see what’s available in your market, search for townhouses on REW today.