A new study by Genworth Canada and the Conference Board of Canada says first-time buyers, retirees and population growth will continue to fuel demand and price growth in condo markets in Canadian cities over the next few years.
The report looked at eight major metropolitan areas and noted that rising prices for single detached homes are encouraging first-time buyers to look at condos as an option, while retirees “remain heavy condominium consumers.” Further demographic support in the coming years will be provided by an aging population.
The report also cited continued low interest rates and employment growth as factors supporting the condo and housing market.
Genworth is a Canadian mortgage insurer based in Oakville, Ontario.
Here are a few more interesting factoids included in their report:
- Absorption of new condos is forecast to fall only in Edmonton in 2012 while small increases are expected in Quebec City and Ottawa
- Calgary absorptions are expected to more than double, but will remain below their boom-era level pre-recession
- Unsold inventories in Toronto will stay below early 1990s levels and are expected to ease by 2013
- Vancouver is the least affordable city in Canada while Calgary is the most affordable when analyzed relative to local incomes
- In Toronto by 2013, the average resale condo price is expected to be $312,352, up by 2.5 per cent
- Vancouver condo resale prices are expected to drop 2 per cent to $348,152
Many of the report’s predictions run contrary to warning issued by some experts and government officials about the Canadian housing market and some specific “overheated” markets.
“This data corroborates our view that the demand for condos in Canada, particularly at the price-point we insure, is well supported by our economy and our population,” said Brian Hurley, chairman and CEO of Genworth Canada in a press release. “For those seeking to own a home affordably in urban centres, condos remain a good option.”