According to a recent report from Re/Max Canada, the inventory of condominiums has significantly increased in major Canadian cities as sellers have re-entered the market in anticipation of higher buyer demand in late 2024 and early 2025.
The report analyzed condominium activity in seven key markets from January to August 2024 and highlighted substantial growth in condominium listings. Leading the surge were Fraser Valley (up 58.7%), Greater Toronto (52.8%), Calgary (52.4%), and Ottawa (44.5%), with more modest increases in Edmonton (17.7%), Halifax (8.1%), and Vancouver (7.3%).
Despite the influx of listings, condominium prices remained stable in most markets. Calgary saw a 15% rise in average prices, followed by Edmonton (4.0%), Ottawa (2.3%), and smaller gains in Vancouver, Fraser Valley, and Halifax. Greater Toronto was the only market where prices decreased by 2.0% year-over-year.
Sales activity in the condominium sector varied, with Edmonton leading with a 37% year-over-year sales increase, while Calgary experienced a more modest 2.6% rise. Other markets saw slower sales as potential buyers awaited more favorable interest rates.
Future outlook: Current lull is ‘the calm before the storm’
Re/Max Canada president, Christopher Alexander, stated that high interest rates and strict lending policies have hindered first-time buyers in recent years. He predicts that the current period of low activity is temporary and expects a surge in market activity, particularly in entry-level price points, as pent-up demand drives demand next spring.
Market dynamics and regional trends
According to Re/Max, Edmonton and Calgary remain in a seller’s market, while cities like Vancouver, Ottawa, and Halifax have more balanced conditions that may shift next year. Toronto, despite sluggish activity, is projected to rebound quickly once market conditions improve.
Buyers are cautious despite rising listings. Early interest rate cuts have not yet stimulated significant buyer activity, but with more cuts expected, market activity is anticipated to increase, especially among end users seeking affordable condominium options.
“Even in softer markets, hot pockets tend to emerge,” says Alexander. “In the condominium segment, we’re seeing a diverse mix of in-demand areas, ranging from traditional communities to up-and-coming neighborhoods and suburban hotspots.”
Condominiums in top recreational areas have shown stronger sales activity, particularly in Toronto and Vancouver.
Investors take a step back except in key markets
While end users dominate the current market, investors have pulled back, especially in Greater Toronto where rising mortgage costs have resulted in negative cash flow for up to 30% of investors. Investor confidence is expected to rebound as interest rates decrease and rental incomes rise.
In contrast, Edmonton has attracted investors seeking affordability. Savvy investors are revitalizing older condominiums to rent out at premium rates, with out-of-province investors capitalizing on the city’s lower costs and development-friendly environment.
Unique opportunity for buyers: ‘Arguably the most favorable climate condo buyers have seen in recent years’
Alexander notes that end users currently have an advantage in the market. Aspiring condominium buyers may experience less competition from investors and a better supply of properties in the near future. This is especially true in Toronto and Vancouver, where the impact of monetary policy has affected investor profits despite high rent and low vacancy rates.
“With values expected to rise, this presents a highly favorable climate for condominium buyers,” Alexander concludes.
‘Inevitable…
Source link
This article was complied by AI and NOT reviewed by human. More information can be found in our Terms and Conditions.
