Student housing in Toronto is a pretty big part of a niche market.
As you may have seen, I recently represented the buyers of a residential condo on a university campus just outside the GTA. I thought I’d share a blog post about some of the experiences related to the transaction while I was supporting my clients with their search for student housing in Toronto.
Whether you’re looking for student housing in Toronto directly, in the suburbs or even out of province, you may experience some of the same things.
Although some students drive, many do not. As such, student housing in Toronto and the demand for it can be directly correlated to the proximity to the campus and the convenience that this short distance provides. Given there is a limited quantity of student housing in Toronto available, the closer you are to the school, often times the greater the cost.
While the market has begun to shift considerably throughout the spring, the demand for student housing in Toronto, namely on campus, is still extremely high. As such, the comps in the particular area I was looking into were primarily selling over asking and on an offer night. Properties were listed $75,000 higher than the same time last year and most were selling $50,000+ over asking.
That’s means that these small bachelor style condos had jumped from an average of $230,000-$240,000 in spring of 2021 to over $350,000 in just one year. That’s a significant increase.
When my client reached out to assist them with securing student housing in Toronto for their son, there were only about 8 units available in their desired location. Of the eight, they were interested in seeing six but two were not available to show due to uncooperative tenants. That left the four that I scheduled for us to see – one on the 2nd floor, 3rd floor, 6th and 8th.
The units all share the exact same footprint, but you’d be surprised at how different some of them felt during the showings based on their view, size of the windows and if they were staged or not. You wouldn’t necessarily think that staging would matter as much for student housing in Toronto as it does for single family residential, but it still made a very big difference.
The penthouse on the 8th floor had the highest ceilings, largest windows and the best view however, the seller (or a previous owner) had installed some tiling halfway up the walls in the living area with a border of sparkly tiles at the top. Not only were the tiles very poorly installed, since my client was male, he wasn’t exactly a fan of the sparkly tiles. In fact, it turned out to be the deal breaker.
After some brief deliberation, he determined that he liked the unit on the 6th floor the best. There was an offer presentation scheduled for the following day so I advised my client to put in a pre-emptive offer that evening. I further suggested that they provide a higher-than-average deposit and to put in their best offer first. Based on the comps, we put together an offer based on $50,000 over the list price and sent in the bully offer with a very short irrevocable time period.
The offer was accepted that evening!
Given the very small footprint of this on campus condo, we figured we would be able to waive the conditions easily. My clients had 20% available for the down payment and had already been pre-qualified for a mortgage for student housing in Toronto.
When they began speaking to their lender however, they were surprised to learn that in spite of the down payment they had, they would still be subject to a CMHC fee of approximately $6,500 since the property fell into a special category of properties and required additional insurance.
After some back and forth, we were able to fulfill the financing condition, but not without some help from one of my fellow REALTOR®’s. I had a family holiday scheduled two days after the offer was accepted and wasn’t able to access the TRREB website from Cuba. The government has this site blocked (along with many others) so I couldn’t send out the fulfillment waiver for my clients to sign. Thankfully, one of the other REALTOR®’s at my brokerage was able to assist.
Next up felt like more of a formality but it proved itself to be another hurdle. The seller had ten days to produce the status certificate for my buyer’s lawyer to review. We got it a day late and had three days available for review.
Upon review of the status certificate however, my client’s lawyer would not sign off on it based on some ambiguities including a slip and fall incident from a few years prior that hadn’t been 100% resolved. Although my clients were not concerned with this incident based on the details the property management company provided, if their lawyer didn’t give them the official green light, this could create potential issues with their lender and in turn, their financing.
We had to request an extension to fulfill the status certificate condition while the buyers found a new lawyer to review the status certificate. The second lawyer they spoke with didn’t take the same issues as the first who may have been a little overly vigilant in his efforts.
Just over a month after we started looking into student housing in Toronto, the on-campus condo officially closed on Tues., May 31. This will provide my client’s son with his home away from home for his remaining three years of school.
While not every family can afford to buy a property for their child when they are attending post-secondary education, it is an extremely wise investment. As noted earlier in my article, the value of student housing in Toronto and surrounding areas has gone through the roof. Not only does a property like this offer convenience, it will more than likely pay for itself through passive (and potentially active) appreciation during the time period that it’s owned. If you can make back at least $10,000-$15,000/yr, you’d basically be recapturing what you would’ve otherwise spent on rent.
Although this was a relatively “small” transaction in terms of property value compared to the going prices of condos in the GTA, there was still plenty to learn, and it was still very interesting to see how different otherwise identical units were among each other.
I am grateful for the great opportunity to work with such amazing clients and help them fulfill their objective of securing an on-campus condo for their son’s remaining years of university.
If you’re in the market for a new home (or home away from home), let’s talk – 647.896.6584 or info@serenaholmesrealtor.com. I’d love to help you fulfill your goals of home ownership and make YOUR property, MY priority! To learn more, click here. For plenty of other great tips, make sure we’re connected on social and you’ve subscribed to my YouTube page.
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