Old vs New: Which Condo Should You Buy?

Alyssa Furtado
by Alyssa Furtado July 24, 2012 / 6 Comments

Since buying a condo is generally a household’s biggest expense, it goes without saying that both experienced and first time home buyers alike fear making a choice they are going to regret. One of the most intense sources of anxiety surrounding condo shopping has to do with the age of the properties available on the market. Should you go for an old condo or a brand new one? In order to make a sensible decision, here are three points to keep in mind.

1. Look at the affordability of condos across your city

If you look at the overall condo market of a given city, you may be stunned by the price differences that exist within a few square kilometres. Some parts of town can remain relatively accessible while others already are out of your price range.

Take Montreal for example: the average price of a condo located in the Centre area was as high as $462,165 at the end of 2011. In contrast, the average price for a similar condo in Montreal South West was $261,688, and brand new condo units are currently available from $237,000 at the District Griffin. Old condos in Montreal Centre are not even likely to match this price!

If you don’t mind ending up in a neighbourhood that is just a few subway stops outside the core of the city, buying a brand new condo can make a lot of sense; it will cost you much less and will probably not need any renovations in the near future. That could be a blessing when interest rates start rising again.

2. Look at market trends in different neighbourhoods

Some say the housing market has been acting like an ever-inflating balloon over the past few years. Figures actually support this metaphor: condo prices in Le Plateau, Montreal, have gone up by 41% over the course of the past five years (29% in the city as a whole).

As you might expect, the increase is more or less radical depending on the part of town you’re looking at, and you certainly can take advantage of this as a future condo owner. If you see that a given neighbourhood has recently been developing fast and is likely to become a prized one, you should consider buying a new condo there if prices are still reasonable. As a result, your property’s value could increase rapidly.

On the other hand, if new condos in the blossoming area you are longing for are already are out of price, avoid looking down on old condos! In fact, new property construction projects generally lift the value of old ones nearby. Therefore, if new condos are affordable in a vibrant area, go for them! If not, you are still better off buying an old condo in that same area instead of a new one in a deteriorating neighbourhood.

3. Keep a critical mind in the face of artificially low maintenance fees

Every month, unit owners pay fees to their condominium corporation in order to cover the expenses they share (i.e. watering the plants, cleaning the hallways, replacing the rooftop, etc.). When you buy a condo unit in a new building, these fees are likely to be relatively low. Huge maintenance projects should not be undertaken for a few years, thereby limiting the immediate need to withdraw big bucks from the common purse.

But as the building ages, important repairs will necessarily have to be made, and the reserve fund may turn out to be insufficient. That’s when serious increases occur! If the ad of a new condo building paints maintenance fees with glowing colours, do not take a leap of faith. Instead, take that extra step that will allow you to see what lies ahead.

As a future condo owner, you should avoid thinking short term. If it is true that the maintenance fees of older condos tend to be higher than those of brand new ones, it is only a matter of time before those new condo fees catch up. It’s not rational to opt for a new condo instead of an old one thinking that low maintenance fees will compensate for the higher mortgage.

About the author: Alexandre Duval is a blogger for District Griffin. He is also currently completing his master’s degree in political science at the University of Quebec in Montreal.


  • Excellent advise for any home buyer to consider.

  • ratehub

    Thank you for the article Alexandre.

    In paragraph two you mention “buying a brand new condo can make a lot of sense; it will cost you much less and will probably not need any renovations in the near future.”

    Is it true that pre con is cheaper than resale on a sq. footage basis? Are there other cost savings in addition to potential renovation/maintenance savings?

    -Alyssa

    • Alexandre Duval

      Hi Alyssa,
      Thank you very much for your comments.
      With regards to your question, it is true that future condo owners are somewhat likely to find lower prices for pre-construction on a square footage basis; the wait you have to go through and the risk you are taking when you purchase pre-con are often traded against lower square footage costs.
      Bear in mind, however, that the risks involved in pre-con purchasing may end up offsetting your square footage gains; read your contract carefully before agreeing to it, as some dispositions could, for example, state that the construction materials are subject to change without notice… Construction delays could also take longer than expected, meaning that you may have to wait longer before you get to settle down in your condo.
      Also note that big condominium projects often involve different construction phases: in other words, construction could still take place in different sections of the building at the same time as you are occupying your unit.
      I hope this helps!
      Alexandre

      • Jessica

        Hi, Im looking at a new 8 unit building. Its a few months away from being entirely finished and some of the units are even closer to being finished. Their prices therefore aren’t exactly pre-construction prices. They have been on the market only one week now and I am seriously considering making an offer. My only concern is that I would be negotiating as the first buyer of any of the units. Does that put me at an advantage or disadvantage. I worry I will purchase near asking price, and the others could sit unsold until the developers are forced to drop prices, and I am the sadsap who over paid! On the other hand, I want first dibs on a particular unit and don’t particularly want to risk losing it. Thoughts?

        • RateHub

          Hi Jessica,

          An answer to your situation is best left to an experienced Realtor. We can recommend a real estate agent to you, one familiar with pre-construction condos. Would you like for us to create an introduction?
          Thanks for visiting RateHub.ca
          All the best!

          • jessica

            thanks, Ive got one. Ill bring my questions to her. thanks!