What makes a city "great?" Is it architecture, arts and culture, financial power, learning institutions or history? London, New York, Paris, Tokyo, Hong Kong and Berlin are all examples of what most people would probably agree are great cities, but what about Toronto?

Toronto, I would argue, can also be numbered among the great cities of the world for many reasons, but most notably for its liveability and relative affordability. Although affordability is an odd thing to include when there are still many people who are homeless or for whom home ownership remains elusive, condominium home ownership is more affordable to more people in Toronto than in other world cities.

In contrast to some international cities -- and even Vancouver, where home ownership, especially in prime locations such as downtown or on the waterfront, is really only affordable to the most affluent -- Toronto is among the few cities in the world where young people can still afford to purchase their own homes in a downtown location, close to the subway, work, shopping and entertainment, or even on the waterfront. Moreover, the quality (and choice) of suite finishes and building amenities offered in new condominiums in Toronto is unparalleled.

For example, the overall average index price for a new condominium apartment in downtown Toronto was $380 per square foot in the third quarter of 2006. Compare that to an average of more than $600 in downtown Vancouver or US$1,120 in Manhattan. A 600- square-foot one-bedroom-plus den condominium apartment that would sell for $228,000 in downtown Toronto, would sell for $420,000 in downtown Vancouver or US$672,000 in Manhattan. Assuming a conventional 75% mortgage at the current five-year bank rate of 6.5% amortized over 25 years, a buyer in downtown Toronto would need to earn a $62,000 salary to purchase this unit, compared with $93,000 a year in downtown Vancouver and US$170,000 in Manhattan.

One of the reasons new condominium prices have remained so affordable in Toronto is competition. With nearly 680 new condominium buildings with more than 121,000 units brought to market over the past 10 years throughout the Toronto Census Metropolitan Area, it has been a buyers' market in terms of prices but also quality -- competition has forced developers to continue to raise the bar by offering better building designs, better amenities, better suite layouts and better finishes.

As a result, more than 113,000 people have become new condominium home owners in the past decade, including more than 4,000 new condominium buyers in the third quarter of 2006 as the condominium market continued to exhibit remarkable strength and resilience. According to the latest Urbanation Condominium Market Survey report, sales of new condominium units in the first nine months of 2006 were slightly ahead (1.9%) of the same time in the previous year, and unsold inventory fell by 6% from the previous quarter, despite the addition of more than 3,200 units in 15 new project openings in the third quarter. Unlike the market of the late 1980s when nearly 50% of condominium units on the market were unsold, the unsold units at the end of the third quarter represented less than 23% of total condominium inventory.

New condominium prices also continued to increase at a slow and moderate pace, averaging 1% to 2% per quarter, reflecting rising construction and land costs rather than speculation. The overall average index price for a new condominium apartment in the Toronto CMA was $337 per square foot in the third quarter of 2006 -- just 2.1% higher than the previous quarter and 8.4% higher than in 2005. The net result: A healthy condominium market in which there are currently 129 projects under construction that have presold more than 84% of their suites, and 67 projects in a preconstruction phase that have presold more than 54% of their suites. All this new condo development activity has also transformed many parts of the city by creating several exciting new neighbourhoods, such as King West, King East, Cityplace and North York City Centre, as well as the revitalization of several old neighbourhoods, such as Liberty Village, Queen West Village and Roncesvalles Village. Not only do new condos bring new residents to an area, but they also bring new energy, new life and new businesses.

Looking ahead, the growth in demand for condominiums will continue to make sense as the population continues to mature and grow -- as young people mature and leave the family home and possibly delay getting married or having children; and as empty nesters look at condominiums as a way to gain freedom to do the things they want to do. Condominium apartments continue to provide ownership options to accommodate such a wide range of changing housing needs, and that helps make Toronto a great city in which to live.

- Jeanhy Shim is president and editor of Urbanation, a quarterly publication that has been monitoring activity in the condominium market in Toronto since 1981. Contact her at jeanhy@urbanation-online.com.