Over the past 6-7 years, I have been sharing with clients that the first-time buyer “home” is now a condo (and no longer a house). The Toronto Real Estate Board (TREB) in its first ever year-in-review which recently came out, confirms this.

Why is this important? For starters, it helps set realistic expectations when discussing affordability, and it helps promote a positive home ownership experience for the first-time buyer.

Yes, there are exceptions as to where a home will be purchased in the Toronto proper area for buyers with either high incomes or large down payments (or both). But for now, the norm is that first-time buyers in the six should be directed towards condos.

In 2015, TREB set a record in sales with 101,299 condo sales reported. Note that these numbers can be slightly confusing because TREB tracks sales from as far as Halton and Peel Regions, Simcoe County, as well as York and Durham Regions, in addition to Toronto.

What I personally find surprising is that in Toronto proper, 60% of condo sales were with first-time buyers! I would have expected the percentage to lie in between 50% – 53%, which is a longer-term norm. When you include the GTA area, the percentage is still a healthy 47%.

Anyone who has been shopping for a home in Toronto is well aware that the average price for a house is above $800,000. Because of this, many buyers are choosing condos as the starting point in their home ownership journey.

Condo values in Toronto have risen at double the pace of inflation last year, which is better than many think at first glance. Most people add very little in appreciative upgrades when entering the condo market. It’s safe to assume with the for majority of first-time buyers (being first-timers), condos are more suitable than houses.

Much more often than not, many first-time buyers who purchase houses find that home improvement costs are not only necessary, but incredibly high — we’re talking tens of thousands of dollars needed upfront to improve the house to current insurable standards (don’t get me started on this…), which can skew the appreciative gains on a semi or detached house. This is not a debate on which is a better investment; but rather, more of an eye-opener.

Predictable upfront and carrying costs on a property for a first-time buyer can help ensure a positive home-ownership experience. Many buyers have shunned condo ownership because of the price appreciation versus a house. When making this decision, what we should be looking at is an apple-to-apple comparison.

Often, what also adds to the confusion for some buyers are maintenance fees. Many buyers mistakenly think that the entire fee is a “lifestyle” fee; but when properly understood, a predictable monthly expense that typically rises with the inflation rate can be the best thing for the first-time buyer.

So, keep an open mind and don’t miss out on a potential opportunity to enter the home ownership market, and consider choosing a condo as your first home.