Individual landowners hiring out contractors to build their dream houses aside, most housing is built by developers looking to make a profit. From a financial prospective, condos are one of the most cost effective things to build. You can’t build a suburban subdivision in downtown Toronto, property values and of course, zoning laws make it impossible. With minimal space you have to build up. 

When a property is being valued, one thing that is taken into account is the space’s highest and best use. In other words, land is valued based on the tallest, most expensive thing that could be there. This is another reason to build up. If there’s a condo next to a one-story restaurant it’s likely that restaurant could be a condo instead. So, that restaurant is going to be evaluated and taxed accordingly. This means that once one condo goes up, it’s almost inevitable that more go up around it. 

Condos vs Rentals

Developers tend to prefer high-rise Condos over high-rise rental apartments. Unlike rentals, condos offer quick turnaround for investors; you sell and then you’re done, there aren’t the same kind of long-term obligations that come with purpose-built rentals. 

Landlords have also gravitated towards condos. Condos have a lot of flexibility, if you want to get rid of a tenant there’s little to stop you from claiming that you’re taking personal possession of the unit. Then you’re free to rent it out to someone else or sell it. 

For the buyer on the other hand, the appeal of the condo is that you can own a piece of real-estate when you may not want or be able to afford a house. In a market where even the most rundown house can cost around a million dollars, having a steppingstone like a condo becomes vital.  

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