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A condo construction site (Deborah Baic/The Globe and Mail)
A condo construction site (Deborah Baic/The Globe and Mail)

Cash Clash

He wants a condo, she wants a house Add to ...

Amy and Richard, 30, Toronto

A backyard or a box in the sky? It's the classic dilemma of the young urban home buyer. Torontonians Amy and Richard, both 30, are about to take the property plunge, but they can't agree on whether they want a house or a condo. With a bull terrier named Spike and plans for a family, things could get complicated.

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HE SAID: Condo

I'm an institutional equities trader, and my work day starts before many people wake up in the morning. I really don't want to be living so far from downtown that I have to take a bus to get to the subway, and then go alI the way down to Union Station to get to the office by 6 a.m. If I drove, parking in the underground garage at work would cost me $300 a month. Amy's a freelance graphic designer and an artist - she doesn't have to commute. I'm worried that with Toronto's real estate market being so stretched, the only house we can afford would be in Etobicoke. Not that there's anything wrong with Etobicoke. But I'd miss being able to walk to the restaurant around the corner for dinner. We don't need that much space, at least for the first little while - if things start to feel tight, we can always trade up in a couple of years. The best part of a condo? No yard work. Enough said.

SHE SAID: House

Everyone figures out how to get to work somehow, and they don't all live near a subway station. I want a house because it feels more like home, and I don't want to buy a condo only to have to move again in two years. Some of the condos we've seen have paper-thin walls, and they look like they were built in about five minutes. They're cramped and sometimes you have to pay really high condo fees. You're living in a home that's supposed to be yours, but yet you're at the mercy of the board - and they can decide to waste money on things like a Christmas tree in the lobby. I'd rather put the money into the house itself - I don't mind peeling off ugly wallpaper and renovating a bathroom. I'd like a yard for Spike to play in, and some place to have a barbecue and a beer with our friends without getting looks from the guy on the balcony next to us.

Years married: 1

Annual household income: $100,000

Price range they're looking for: $400,000 to $500,000

Down payment: 20 per cent

Current rent: $1,500

Debt: $0

KELLEY KEEHN'S ADVICE: Go for the condo

Generally speaking, a house will appreciate more quickly than a condo. But in your case, I vote for a condo close to Richard's office.

It's all about the commute. Consider the potential resentment factor of the torturous twice-daily trek. A few years ago, Swiss economists Bruno Frey and Alois Stutzer studied something they called "the commuter's paradox." They found that people, when deciding where to live, consistently underestimate the pain of a long commute. According to their calculations, a person with a one-hour commute has to earn 40 per cent more money to be as satisfied with life as someone who can walk to the office.

Add to that the ongoing work required to keep up a home: repairs, maintenance, gardening, renovations. I'm guessing Richard would be a lot less likely to assist with much after spending so many frustrating hours getting to and from work. On the other hand, as a freelancer, Amy, you have some time and flexibility in your day. Getting out to walk your dog isn't an unreasonable compromise. Yes, condo fees can be steep and the walls can be paper thin. So forgo the buildings with extra amenities and spend more on a condo that's newer and made of concrete.

The reality is you may move again in a few years. But if your plan to start a family is an imminent one, I still wouldn't recommend a house in the suburbs. Instead, rent longer and save up for a home closer to Richard's work. Time and patience will serve you in the long term.

Kelley Keehn is the host of W Network's Burn My Mortgage. Her website is kelleykeehn.com.

Do you have a question for Cash Clash? E-mail cashclash@globeandmail.com

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