In Toronto’s hot housing market, how did this midtown condo sell for $420,000?

In the city’s competitive housing market, this condo that touts itself as “affordable living in a premium community” in midtown Toronto has recently sold for $420,000.

Listed for $399,000, the one-bedroom, one-bathroom unit nestled between Eglinton and St. Clair has an upgraded bright kitchen, a spacious living room and a dining area.

With similar, nearby units selling for much more, even double, it would appear that this unit would be snatched off the market in no time.

But the buyer pool for this “boutique building” is limited, says realtor Stuart Nodell.

why? Because it’s located in a co-operative, or co-op property.

Co-op spaces operate similarly to a rental, but without the traditional landlord structure. Residents become members of the co-op, giving them the autonomy to govern themselves and vote on decisions like whether to raise their housing bills.

While properties like this one at 1648 Bathurst Street are celebrated by housing advocates, elected officials and tenants as a way to address soaring housing costs, they may be unappealing to investors looking to park their money in a unit and sell for a significant profit in a few years as they don’t appreciate at the same rate as non-co-op properties, Nodell says.

On the other hand, Nodell says that these units may be the perfect stepping stone for first-time buyers looking to dip their toes into the real estate market without paying the price that comes along with traditional units.

Walking into this property, you’re met by a narrow hallway leading to the bathroom and a 115-square-foot bedroom to the right. To the left sits a large open living area spacious enough for a large couch, a coffee table and two chairs, and room to spare.

Also in the living room is a fireplace with a mantle, bright walls, a large window and a view of the dining area staged with a small, circular table and two chairs. Steps away from the dining table is the kitchen with white cabinetry, medium-toned wood countertops, an industrial-looking sink, condo-sized appliances and storage.

Another unit in the area with similar square footage is listed for $699,900 and will likely sell for more, towering over the $420,000 selling price the new buyer of this co-op unit paid.

The seller, a young professional, bought the property for $350,000 in early 2020, landing them $70,000 in profit in just two years from holding onto the property. Likely, the seller paid monthly mortgage payments than he would on rent, Nodell said.

Typically, co-ops require buyers to front a 20 per cent deposit, and they often have a select pool of lenders who will mortgage the rest, Nodell says. Plus, buyers have to be approved by the co-op board.

“Some people look at renting as throwing away money. This is an excellent alternative,” even if the initial down payment is higher, Nodell says.

Younger people have been increasingly looking to purchase these properties in the last few years, Nodell explains. Still, many buyers are middle-aged or older adults who have been renting for years and are looking for a change but can’t afford to buy into traditional units.

“I have to believe more people are going to look at (co-ops) as more viable options,” Nodell said.

In 2003, this property sold for $119,000.