Canadian condo market growing to take lions share of real estate: report
While it continues to be challenging to buy a house in Canada, the condo market has been growing.
RE/MAX just released its 2022 National Condo Report, which showed that the condo market share has increased in Canada’s major cities.
Looking at six markets in Greater Vancouver/Fraser Valley, Calgary, Edmonton, Greater Toronto, Ottawa, and Nova Scotia, the report shows that condo values are up in almost all markets year-over-year.
RE/MAX Canada President Christopher Alexander said in a release that affordability is the key issue in today’s housing market.
“Rising interest rates have slowly eroded purchasing power and, despite lower housing values and cooling market conditions, buying a house is more challenging now than ever before,” he said.
“For those who have adjusted expectations with every rate hike, the cost of carrying a mortgage versus renting is now more comparable, given sharp double-digit increases in rental rates throughout the major markets, but especially in BC and Ontario,” he said.
While there have been fewer sales in 2022, condo sales represent a greater percentage of overall sales because buyers are desperate for homeownership at an affordable price.
In fact, most of the condo activity is happening at lower price points. But the condo market is losing inventory because of the “attractive rental market, as would-be sellers simply opt to lease their units long-term.”
RE/MAX
In the future, condo sales are expected to rebound in 2023 and 2024 as interest rates begin to stabilize or decline, says RE/MAX.
“As demand for condos ramps up again, inventory will contract, and price growth will likely regain a stronger upward trajectory. The impact of the slowdown in new condominium construction starts combined with an inadequate supply of purpose-rentals against a backdrop of intensified population growth may exacerbate inventory levels of existing product,” said Alexander.
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Greater Vancouver and Fraser Valley condo market
The condominium market was stronger in some communities than in others.
- Vancouver West: 12.4 % decline year-over-year, with 3,211 sales versus 3,666 sales in 2021.
- Coquitlam: 12.8% decline year-over-year, with 1,000 sales versus 1,146 in 2021.
- Surrey North: 11.7% decline year-over-year, with 1,100 sales versus 1,255 sales in 2021.
Calgary condo market
Calgary is booming with condos. Eleven out of 12 areas featured in the Calgary report saw an increase in condo sales, from 17.5% in Eau Claire to a 338.5% rise in Saddle Ridge.
Edmonton condo market
Edmonton’s affordability played a big part in the increase in condo sales seen here. Out of the 26 markets, 22 saw an increase in home-buying activity, from sales up 2% in Queen Mary Park to a 112% increase in Lymburn.
Greater Toronto Area condo market
Most areas saw double-digit declines in sales of condos and townhomes, with a few exceptions. Overall, the average decline in sales year-over-year was 31%. Still, the condo market didn’t give up much market share, with 36.3% in 2021 and 34.5% in 2022.
Ottawa condo market
Condo sales in Ottawa are “holding their own,” says RE/MAX, with buyers returning to the downtown core. Overall, the number of units sold was down.
Halifax-Dartmouth condo market
Condos are still a popular choice for people looking to enter the housing market in this region. However, softer detached housing values have detracted some entry-level buyers, according to RE/MAX. Low inventory has led to multiple offers on condos in key city areas.