Which sector is faring better in the turbulent condo market?

The ongoing struggle between supply and demand is a familiar tale for those in the real estate industry. In Canada’s two largest cities, the condo markets heavily favor buyers, as per a CIBC report indicating that Ontario and B.C. are the major markets affected by the slowdown in condo investment, where investors typically dominate purchases. The sales-to-new listings ratio in Toronto and Vancouver shows that the current market is advantageous for buyers due to the surplus of condo supply.

Vancouver vs. Toronto

As the Chief Economist at the BC Real Estate Association, Brendon Ogmundson closely monitors the housing market in Metro Vancouver and observes the activity in the Greater Toronto area. He notes that prices in Vancouver have remained stable, with sales maintaining around a thousand per month and 5,000 to 6,000 active listings, translating to about five to six months of inventory. In October, the average apartment price in Vancouver was $757,200, while in Toronto, the average condo price was $694,038.

Pricing strategies

Realtor Carolyn Pogue, with Royal LePage Sterling, employs different pricing strategies based on market conditions when listing condo properties in Metro Vancouver. She mentions pricing low to attract multiple offers, pricing at fair market value for a quick sale, or pricing high for negotiation. She predicts a strong market in 2025 with a price-sensitive environment.

The pre-sale dilemma

Stefan Greiner, VP of advisory at Zonda, observes a significant gap between released and unsold inventory and quarterly sales in the new home market. Buyers have a variety of choices, with builders offering incentives like free parking spaces and reduced deposits. In Metro Vancouver, real estate developers are offering aggressive assignment benefits to attract buyers.

The future of the condo market in Canada’s largest cities

Greiner foresees positive trends in the re-sale market, with potential interest rate reductions leading to increased sales activity. He predicts a re-engagement of buyers, initially in the re-sale segment, before extending to other areas.