Residential Property Types in Toronto Real Estate Market by Land Ownership and Architectural Style
Tuesday Jan 18th, 2022
Typically in Greater Toronto Area, there are 3 forms of land ownership: Freehold, Condominium and POTL, and 4 types of architectural styles of properties: Apartments, Townhouses, Semi-Detached Houses, and Detached Houses.
Let’s first look at the broad classification from the form of land ownership. The first type is freehold properties. This form of ownership means the property owners not only own the building, but also own the land where the building is located. Along with the ownership of the land, the owner has the responsibility to maintain the land, including cutting grass in the summer and shoveling snow in the winter.
The second type of ownership is condominium. This form of ownership means that the owners own a residential unit, but the land where the building is sitting on top is jointly owned by other unit owners of the building. Maintenance of the common elements, including hallways, elevators, recreational facilities, etc., is taken care of by the management company. In return, owners will have to pay the maintenance fee. Condo apartments and condo townhouses are the most common types of condominium properties in recent years.
Parcel of Tied Land (POTL)
The third form of ownership is the Parcel of Tied Land (POTL). This type of ownership is a form of Freehold ownership as POTL property owner owns the land. POTL ownership shares some similarities with condominium ownership in which there are still some public facilities, such as driveways, parking lots, golf courses, and some gardens. For the maintenance of these common areas, owners still have to pay a POTL fee, typically lower than the maintenance fee for condominium properties. In GTA, as of 2021, we often see monthly POTL fees ranging from $100-$180 each month. The more common properties of POTL ownership are POTL townhouses.
There are two categories of apartments.
Apartment building are usually older apartments. The whole apartment is owned and managed by a management company hired by the owner. All people living in the property are tenants, and everyone signs a lease with the property management company. Usually this kind of building is relatively old, typically over 30 years old. They can easily be distinguished by their cement exterior, whereas the new condo buildings are usually covered by glass curtain wall. These apartment buildings often have large number of units on each floor, way more than typical condo buildings.
Condominium Apartment (Condo)
Another type is the condo apartment, where each unit has its own private owner. The private owner can find tenants and rent the unit out with a separate contract, or the private owner can live by himself/herself in the unit. The obvious advantage of condo apartment is that it is the most affordable property type. Condo apartment usually has relatively complete facilities, such as swimming pool and gym. Property owners do not need to cut grass and shovel snow, and garbage disposal is also managed. Moreover, condo apartments are usually located in lively areas with public transportation and life is very convenient. The downside is that there is no direct ownership of land and the space is relatively limited. Owner has to pay the maintenance fee to look after the common areas and public facilities. The average condo maintenance fee is approximately 64¢ per square foot as of 2021 in the Greater Toronto Area.
Townhouses can be either freehold or condominium in terms of ownership.
Traditional Townhouses (Attached / Row Houses)
The traditional townhouses are connected in a row. Multiple units are connected, so usually we have neighbours on the left and right, except for corner units where there is only one neighbour.
Note that Traditional Townhouse can be Freehold or Condominium in terms of land ownership. From the appearance alone, one cannot tell the ownership type.
The architectural style of the stacked townhouse is different from the traditional townhouse in that it not only has neighbors on the left and right, but also neighbors above and below. If the unit is on the lower floor, there will be neighbors above. If the unit is on the upper-floor, there will be neighbors below.
Stack Townhouses are almost always condominium ownership. Since two units are stacked and sitting on the same piece of land, it is impossible for one unit to own the land directly.
Semi-detached house is connected by two houses, sharing a wall in the middle. So there is a neighbour on either the left or right side. Like a detached house, Semi-Detached House also has its own front and backyard, basement, garage and own driveway. Semi-detached houses are all freehold properties.
Typically, Detached Houses have large lot size, front and back yard, as well as the property itself. The owner owns the land and therefore obligated to maintain it. There are also several kinds of detached houses. The most common detached houses are also the more traditional ones, with older architectural style and decoration.
Newly renovated detached houses are those that a builder or developer demolished a traditional house to completely rebuild it. Lots of times, the newly renovated detached house is designed with modern exterior and interior, with higher ceiling.
Bungalow is an older type of detached house. Often, bungalow has a larger lot because land was not as expensive as today. Therefore, bungalows, although older, does not necessary mean cheap due to the value of the land. Bungalows are liked by seniors and buyers who are unwilling to climb up many stairs.
Advantages and Disadvantages of these 4 properties types
Let's take a look at the advantages and disadvantages of these 4 types of properties.
Apartments are the most affordable, while detached houses are the most expensive. This is easy to understand, because a single apartment has lowest construction cost, while detached house cost the most to build, along with the land value.
As of the end of 2021 and the beginning of 2022, in City of Toronto, the average sold price for a Condo Apartment is $730,792, versus the average sold price for a Detached House is $1.698M.
The privacy is directly proportional to the size of the lot and the property, since it defines your distance to the neighbour. Therefore detached homes have the best privacy, and the condo apartments have the least privacy.
In terms of the convenience of life and public transportation, apartments have advantages. Apartments are usually located in places with public transit, some next to transportation hubs, or even right on top of the subway station. The surrounding living infrastructures such as community centers, schools, restaurants, shopping are more established. Apartments are very popular among young people who enjoy dynamic urban life.
On the contrary, people who live in freehold property usually need their own vehicle for transportation as these detached houses and townhouses are not readily connected to the public transit system.
Buying and Selling Toronto Real Estate
Whether you are buying your first condo apartment, or selling a detached home, Priscilla Han Realty can help you.
We work actively in the Greater Toronto Area (GTA), including Markham, Mississauga, North York, Peel, and the City of Toronto.
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