Owners of divided co-ownership housing have faced a sharp increase in their monthly charges since 2020. For a quarter of them, “condo fees” exceed $400 per month.
In a recent Léger survey on the purchasing intentions of Quebec households, the owners concerned were asked about this unique aspect of the co-ownership lifestyle.
On average, the 161 respondents who said they had owned a condo for at least five years reported condo fees of $281 per month in 2023, representing an increase of $46, or 19%, in two years .
Worse, a quarter of owners now pay $400 or more per month in “condo fees.” In 2020, this was the reality for only 8% of them.
In fact, the popularity of condos as a housing product seems to be eroding, according to the survey. Among those surveyed who plan to purchase a property within five years, condos fell 2 percentage points, being the top choice of 14% of respondents in 2023, compared to 16% in 2020; an appreciable gap, said Christian Bourque, executive vice-president at Léger.
There’s a change. My impression is that with the new provisions of the law on contingency funds, there is a catch-up phenomenon in co-ownerships where funds were insufficient.
Christian Bourque, executive vice-president at Léger
In fact, “Law 16”, adopted in 2019, makes the study of the contingency fund compulsory, but after 2027 or later, but we can think that co-ownership associations have found it in the interest of seeing to it without delay.
Loss of interest in the condo
“With the interest rates that we had, I was very surprised to see that the co-ownership is not doing better on the resale market than it is doing at the moment,” confided Charles Brant, director of market analysis at the Professional Association of Real Estate Brokers of Quebec (APCIQ), in an interview on the sidelines of the annual Window on the Real Estate Market event, which was held on Thursday.
It’s really the single-family home that attracts people’s interest, especially young people.
Charles Brant, director of market analysis at APCIQ
To understand the public’s disaffection for condos, Mr. Brant lists the co-ownership charges which are increasing significantly, the difficulties in obtaining insurance, the dizzying special contributions and the cases of failing construction quality. “People are afraid to buy a condo,” he said.
On the new home market, the condo market share has been declining for 10 years, confirms Francis Cortellino, senior economist at the Canada Mortgage and Housing Corporation, who participated in the event. However, the condo is a more affordable product than the house, ideal for first buyers. In this era of the fight against climate change, co-ownership is a sensible ecological choice because of its density which limits urban sprawl, compared to a subdivision of single-family homes.