Record growth is not in the foreseeable future of the condo market, but it is also likely the sector will be able to avoid a major downturn, according to the latest Conference Board of Canada condo report released by Genworth Canada. While markets in major centres such as Vancouver, Montreal and Toronto have been of particular concern, The Summer 2013 Metropolitan Condo Outlook suggests population growth and employment gains will help maintain demand levels to absorb supply inventory. "Whether it's first-time homebuyers entering homeownership, empty-nesters looking to downsize or professionals seeking a shorter commute, condos appear to remain a popular option for urban Canadians," said Brian Hurley, Chairman and CEO of Genworth Canada.
The Report notes economic factors affecting the housing market, such as employment, interest rates and population growth, will only undergo moderate changes. Employment is expected to rise modestly in the medium-term and interest rates are expected to increase gradually, while population expansion and demographics will continue to support demand in regional markets
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Condos More Affordable in Calgary and Edmonton
Alberta regional markets clearly vary in strength, all will benefit from an expanding population and a rising share of condominium-loving empty-nesters whom are older” the Conference Board of Canada report adds.
It also says that weak pricing will help affordability. It predicts that principle and interest payments will drop in at least five major cities this year, led by a 2.5 per cent decline in Victoria.
While payments are expected to rise in Alberta, the report says that Calgary and Edmonton are still the most affordable condo markets when local incomes are taken into account, with mortgage payments taking only about 9 per cent of household income. “By contrast, we expect payments to eat up roughly 20 per cent of Vancouver incomes,” it says.
Vancouver's Condo Market is not on the verge of collaspe as it has been reported by many doomsayers that state that the Vancouver Market is overbuilt. Yet, there has never been any evidence that there are too many condos under construction in Vancouver. The Conference Board of Canada has supported this argument by stating that in it's future predictions the Toronto Condo Market Will Remain Stable.
A new report from the Conference Board of Canada predicts that the much-watched condo sector will avoid an ugly downturn, even in Vancouver.
Economists and policy-makers are keeping a close eye on condos, especially in the country’s most populous city, where cranes dot the sky. A number of economists say that too many units are being built, a development that would put pressure on prices. The Bank of Canada has highlighted the risks that this market could pose to the economy
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Greater Toronto Area REALTORS® reported 3,359 sales through the TorontoMLS system during the first two weeks of August 2013. This result represented a 22 per cent increase compared to 2,743 sales in August 2012. Sales were up on a year-over-year basis for all home types. Total new listings were up over the same period, but by a much lesser rate than sales.
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"The strong annual sales growth experienced in July was sustained in the first two weeks of August. The fact that sales were up for all major home types in the City of Toronto and surrounding regions suggests that a wide range of buyers are active in the marketplace today - from first-time buyers through to existing home owners whose housing needs have changed," said Toronto Real Estate Board President Dianne Usher.
The average selling price during the first two weeks of August 2013 was $494,617 - up three per cent in comparison to the same period in 2012.
"Sales growth that is stronger than new listings growth is indicative of more competition between buyers. Against this backdrop, it makes sense that the average selling price continued to grow," said Jason Mercer, TREB's Senior Manager of Market Analysis.
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