In the first condominium buildings, amenities were pretty much limited to indoor pools and a generic “party room”. Now buyers are looking for fitness centres and entertainment lounges. Developers are marketing lifestyles, not simply condo units. With the size of the apartments shrinking during the last decade, developers say these communal spaces are more important than in the past and add value to the building.
When purchasing a condo, it’s important to look at the amenities that are featured and determine if they will add value to the building a few years down the road, or if they will become just another expense item in your monthly maintenance/strata fees.
At the Me Living Condos in the Toronto suburb of Scarborough, the developers are aiming their marketing at young buyers. “You are looking all around the City of Toronto, but the prices that are being listed are more expensive than your parents’ 2000-sq.-ft. house where you grew up!” says the Me Living Condos website. “You want to invest in something that makes sense; that has a lot of amenities, a lot of places to eat and see… so you don’t get bored of it after a year…”
The developers say they offer a “rooftop lounge and pool, Hollywood-style theatre, a fitness area and new fitness equipment, and your building even has a sports lounge!” It also has an outdoor water feature that will be converted into a skating rink in winter. Units start in the mid-$200,000s.
In Vancouver’s Tate Downtown condo, amenities will include a concierge, a 12-seat theatre, a business meeting room, a private dining room, a “social room” with a chef’s kitchen, a billiards room, a library and a 2,100-sq.-ft. fitness centre, including yoga and Pilates studio.
Toronto’s luxury 1 Yorkville project will include a 14,000-sq.-ft. spa including an open-air pool and hot tub, water massage tables and a sauna. The rooftop lounge will include an outdoor movie theatre with tiered seating for private screenings.
Allen Chan, who designed the spaces at 1 Yorkville, told The Globe and Mail, “Any developer would love to have as much amenity space in his building as possible. It only adds to the value of the property. Amenities sell.”
But once you have purchased your condo and lived there for a few years, how will the amenities impact your monthly maintenance fees? Toronto real estate broker Carl Langschmidt of Property.ca Realty, which operates the Condos.ca website, recently released a study that tracks the maintenance costs in MLS sales data for every Toronto condo unit sold during the last 10 years, in 660 buildings.
“The study confirmed a number of long-held beliefs about condo maintenance fees, such as the more amenities, the higher the fees,” says Langschmidt’s company in a news release. “But the ‘worst offenders’ were not the obvious — pools, for example, only affected fees on average by three cents per square foot. It revealed a number of other surprises including the true cost of parking and the fact that older doesn’t necessarily mean more expensive when it comes to maintenance.”
Condos.ca says many buyers only factor in the initial purchase price for parking, but says on average, parking maintenance fees are $43 a month and can be as high as $148 a month. “Resale values aside, it’s clear that in some buildings, it’s cheaper to rent parking,” says the release.
The study also found “no discernable correlation between the age of the building and maintenance fees and in fact, there are numerous buildings 20+ years in age with maintenance fees priced below average for the city.”
It says since maintenance fees are based on unit size, and older buildings have larger units, it appears that older buildings have higher fees. On a per-square-foot basis, this isn’t true.
The study also says fees in new buildings rise much faster than in older condos. Fees went up an average of 14.8 per cent in new buildings during the first three years, twice the market average.
It cites a case study where fees in a Toronto condo were reduced by 30 per cent following an audit and budget overhaul, without diminishing the reserve fund. “The message here is that fees can often be reduced with better management but with no prerequisites or training required of volunteers and no industry regulation of condo boards, it’s hit and miss as to the success of individual condo boards,” says Condos.ca.
Average Toronto condo fees are 59 cents per square foot, but they range from 28 cents to $1.01 per square foot, the study found. The fees for buildings with a concierge, gym and pool average 59 cents per square foot, while the average building without these amenities costs 45 cents per square foot.
Visitors who register at Condos.ca can check out the fees of individual buildings for free.
Lots of people buy memberships in gyms and don’t use them, or they buy exercise equipment that ends up gathering dust in their basements. Buying a condo with a state-of-the-art fitness centre or other amenities could be a waste of your money if you don’t use them. However, it may add to the resale value of your unit, depending on how well the condo board manages and maintains the building.
Written by Jim Adair