According to Statistics Canada, one in eight dwellings in Canada was a condominium. Of these, over 3/4 are in Toronto, Vancouver and Montreal. These cities are building upwards instead of sprawling. The odds are, if you’re buying a condo in 2018, you’re buying in some sort of high-rise.
If you’ve visited a pre-construction sales center or Realtor.ca, you’ll notice that as a unit is higher up in a development, the more expensive it gets.
For most new condominium buyers, this presents yet another choice. Should I buy higher up, in the middle or on a bottom floor? In most condo developments, the same unit repeats floor after floor. If all units are the same, why pay more for altitude?
Choosing the right floor could have an impact on resale value. It’s therefore important to figure out which floor to buy on.
A few things first
Before reading any further, the advice we’re providing below assumes that you’ve chosen the development you want to live in. If you haven’t yet, you can check out our guide to buying pre-construction condos.
Assumed beliefs vs research findings
If you’ve spent time researching the phenomenon of unit price vs floor position, you’ll come across the figure of $1,000 to $2,000 per floor.
The reality is that this is an industry standard condo developers use to estimate the extra cost they can charge for units on high floors. This figure isn’t correlated with resale prices or hard data.
When it comes to resale, the data is too murky to come to a definitive “floor vs resale price” ratio. Why is that? It takes a long time to collect resale data. On top of that, market trends (ie hot or cold market) and unit upgrades (ie finishes and upgrades) affect resale. Resale data points aren’t consistent over time and collating data would be an incredible manual data entry feat.
What now?
So what does the research say?
Across most North American cities, the higher you live, the higher your rent will be. According to one study in a Toronto rental high rise, the average increase was $8 per month per floor.
However, the budget-minded pre-construction buyer shouldn’t rush to buy on the highest floor possible. It’s critical not to neglect upgrades that actually increase resale (you can consult our guide to condo choosing finishes for more information on this topic).
Pay for the view first
The rule of thumb to follow for choosing which floor to buy on relates to the view. If you can buy a unit whose view will never be obstructed by future construction (ie right against the water, overlooking a heritage building, next to a park), then it’s worth buying high.
How high? As high as you can afford without compromising critical upgrades. Think parking, electrical, kitchen and bathroom hardware upgrades (ie soaker tub, walk-in shower, countertops, upgraded faucets).
If there is an obstruction such as an existing building, you can still pay for a view. But make sure you clear the obstruction by at least two floors. In most cases, clearing obstructions like trees require buying floors 5 and above.
With this in mind, you’ll want to consider noise. Will the unit be facing a busy street or busy pedestrian area? Everyone’s sensitivity to noise is subjective but most people find street noise to be imperceptible or negligible in the 7-10 floor range.
Diminishing returns
Once you’ve cleared obstructions, we’ve found that the resale value diminishes per floor as you keep climbing. Full disclosure, this is anecdotal. As we’ve explained earlier, reliable data on the subject is unavailable. But if the view is stunning starting at the 20th floor, buying on the 25th or the 30th might not correlate to higher resale prices.
Of course, this advice doesn’t apply to penthouses. Penthouses always fetch the highest premium because of their cachet. They are often the only unique layouts and designs of that type in that building. If you can afford a fully-upgraded penthouse, this guide doesn’t really apply for you since you’re buying on the top floor anyway. But feel free to keep reading!
When there is no view
If buying a view is out of your price range, you may want to consider buying on the ground floor. These units sometimes come with desirable amenities that offset the lack of a view. Higher ceilings, gardens and terraces and even the option of a BBQ are sometimes available on the ground floor.
If you’re sensitive to noise, the ground floor may not be the best option for you. You’ll be exposed to the noise from the street traffic. You’ll also have to deal with the back and forth of residents using the common area to get to the elevator.
Depending on the layout of the building, this may not be an issue. If your desired unit is at the end of an L or U-shape floor plan and the elevators are before the bend, the noise will likely be attenuated.
For potential buyers in the Vancouver and Toronto markets, keep in mind that ground floor units are becoming rare. Municipal governments are forcing developers to use the ground floor for commercial projects. Montreal and Ottawa are beginning to follow this trend.
Pros and cons of buying on the ground floor
Pros
- No need to use elevators or stairs
- No neighbors under you
- Generally larger terraces, sometimes BBQs allowed
- Cooler in summer months
- Wheelchair and disabled accessible
- Some developments have completely different floor plans for ground units. This increases the uniqueness of your unit thus increasing resale value.
Cons
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Depending on amenities, some developers put a premium on ground floor units
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A lower sense of security due to your patio door being easier for burglars to access
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If other buildings are around, no view
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Generally less daylight from other buildings blocking the sun
Pros and cons of buying in the lower floors
Pros
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Lower cost than the higher floors
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Security issues are non-existent: you can leave your windows open all day
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More light than the ground floor
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Corner units may have good views
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Can still use the stairs
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Fewer stairs to go down in the event of a fire alarm
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Less dirt and pollen can reach your unit than on the ground floor
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The higher up you go, the better the privacy from people on the street
Cons
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Less chance of a good view
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Impact on resale Resale since the view and noise levels may not be as desirable as high floors
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You’ll have people above and under you – the potential for noise disturbances
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Not suitable for handicapped or disabled people especially during fire alarms or power failures
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During rush hour, the elevators going down to the garages get crowded with residents from the floors above you
Wrapping this up
When it comes to buying a condo, try and pay for the view first. A good view will always resale easier. If a view isn’t available, consider buying on the ground floor or the floors in the 5 to 10 range.
Depending on your tolerance to noise, look into getting closer to the street level.
Finally, if you can’t pay for a view, spend your money on high-end finishes for your condo. At the time of resale, this will differentiate your unit from the others. Don’t favor upgrades for a higher floor if there’s no view.
