First-time homebuyers: should you buy a condo or a house?

Learn about what to consider, what to watch for, and how to go about making the wisest decision when getting into the real estate market.

In today’s housing market, there is a lot of pressure to just buy something. We’re often told it doesn’t matter what you get, just as long as you get on the property ladder. However, this can rush you through the process of taking time to carefully decide what you need, where you should buy, and the type of home that’s right for you.

Understanding what it costs to buy and own a home in Canada is critical to making the right choice. If you’re a first-time homebuyer, one of the first questions you should ask is “condo or house?”

By creating a homebuying checklist, and carefully moving through the steps of buying your first home, you’ll be better equipped to make a wise decision when faced with the “condo vs house” question. 

Choosing between buying a condo or house as a first-time homebuyer can be tough. To help you make a decision, try making a list of the pros and cons of buying a condo vs a house. But first, it is important to understand some of the key differences between these types of properties.

A condominium is a single unit in a multi-unit building or community. Condominiums can be townhouse or apartment-style, and occasionally even completely detached. However, condominium owners share common areas and contribute to various shared expenses, including the upkeep of the common areas like hallways, courtyards, or even gyms and pools by paying monthly maintenance fees.

A condominium is governed by a board of directors for the condominium corporation. Unlike owners of freehold, non-condominium homes, owners of condominiums must abide by the rules and regulations of the condo corporation. This means if you want to renovate your home or even paint the colour of your front door, you need to get approval from the condo board.

Finding the money to buy your first home in one of Canada’s urban centres can be challenging, especially as prices have continued to rise each year. Yet if you love the urban amenities and fast-paced lifestyle and are determined to become a homeowner in the downtown area of a major city, the cash you need upfront to purchase a condominium will usually be less than what you’d need to buy a house.

Condominiums can be a good choice for first time homebuyers who want to avoid the worries of upkeep on a property and who don’t mind renovation/exterior improvement restrictions that come with condos. They are also a good choice for homebuyers with a busy lifestyle, and those who are comfortable with a smaller living space, close neighbours, and either a small patio, balcony, or no private outdoor space at all.

Note: while you’ll also find condominium projects in suburban areas, consider the resale opportunities of these condos. Unless you’re planning to live in your first home for the long-term, you’ll be putting your condo on the market in a few years. Ask local real estate agents about the market for these condos.

It’s also important to be aware that maintenance fees are factored into the qualification calculations for your mortgage, and they could reduce the mortgage amount you qualify for.