Condo fees in Canada have surged at a compound annual rate of 8.6 per cent from 2010 to 2023, according to Statistics Canada data, far exceeding the 2.34 per cent inflation rate over the same period. This rapid escalation is squeezing buyers and impacting mortgage affordability.
Why Condo Fees Are Rising
The increase is partly due to a structural correction after years of underfunded building reserves and artificially suppressed monthly budgets. Condo boards also cite climbing costs for insurance, utilities, labour, materials, amenities, and tighter reserve-fund legislation. In some cases, boards may spend excessively, as noted by mortgage columnist Robert McLister: “Occasionally, the board spends your money like it’s a dare, just to see how much they can waste before you say something.”
Impact on Affordability
Rising fees not only dent monthly budgets but also reduce the amount banks will lend. Brendon Cowans of Property.ca told the Canadian Press that condo fees average 75 to 85 cents per square foot in many markets, equating to roughly $800 per month for a 1,000-square-foot unit. Lenders include only 50 per cent of condo fees when calculating debt ratios, as fees cover expenses freehold owners pay directly, such as utilities and maintenance.
For a buyer earning $100,000 annually with a minimum down payment and 30-year amortization, that $400 added to monthly obligations reduces the affordable home price by nearly 13 per cent—about $59,000. With most first-time buyers already stretching their budgets, this difference can be decisive.
Strategies for Buyers
To keep fees in check, buyers should review a building’s reserve fund study and minutes from board meetings to identify potential special assessments or fee hikes. Opting for newer buildings with modern systems can avoid deferred maintenance. Comparing fee structures across similar units and negotiating fees into the purchase price can also help. Finally, consulting a mortgage broker to factor fees into pre-approval ensures realistic expectations.
