House advantages for resale value
Higher price appreciation
Apart from rare exceptions, house prices appreciate at a higher rate than condominium apartments.
According to RealNet’s latest report, prices of low-rise homes in the GTA (which include detached, semi-detached and townhouses) climbed up by 8% in 2014, compared to 4% for condos.
Why?
In Toronto, a key reason is supply. While the condo market is keeping pace with demands of buyers, thanks to record breaking number of new condo completions, the same can’t be said for houses.
With houses in tight supply, the market fails to address the demand of buyers eagerly in search of a single-family residence. This in turn, puts greater pressure on existing stock and drives up resale value faster for houses vs condos.
When looking at real estate overall, one main factor comes into play – land.
By buying a house, you not only own a home but more importantly, you own the actual plot of land the property sits on.
Owning land is the most lucrative part of your house purchase, because the demand for a plot of land will always increase. As the supply of land is fixed and demand is only set to go up, (thanks to urbanization and population growth), land proves to be a primary driver behind a higher resale value of a house. In a condo, you only share ownership in the common areas.