The Summer 2013 Metropolitan Condo Outlook report, released by Genworth Canada, doesn’t say the market is due for a big upswing, but major Canadian cities (including Toronto) will stay afloat over the next few years as population growth and employment gains keep demand levels in line with inventory supply.
Employment is pegged to rise modestly in the near future, or medium-term, and interest rates are expected to only increase gradually. Population expansion and demographics are expected to keep up demand in regional markets.
“As condo starts near past averages and inventories edge closer to demand, we are seeing the condo market stabilize both in terms of the price of existing units and the volume of new construction,” said Robin Wiebe, Senior Economist at the Centre for Municipal Studies at The Conference Board of Canada, in the news release.
“Softer prices and positive economic factors continue to make condos an affordable way for Canadians to achieve homeownership.”
Here’s how the major metros are expected to fare:
- Quebec City condos are expected to see a moderate rise in average resale prices with a 1.1 per cent boost in 2013 and 1.9 per cent increase in 2013, which should allow demand to increase until 2016 as it catches up with supply.
- Montreal’s steady economic growth and aging population is expected to push sales, but volume growth is expected to be a modest 1.4 per cent per year from 2015 to 2017.
- Since Ottawa was hit hard by government spending cuts, the city saw demand for condos and prices in the city soften. However, economic growth is being forecasted for 2014, which is expected to bolster demand and sales by 2.5 per cent between 2015 to 2017.
- Toronto’s large inventory of completed and unsold condo is often cited as a reason to fear a market crash. Though builders are expected to be more cautious and pull back from the market in 2013 and 2014, a stable economy and population growth are expected to revive the sector in 2015.
- Calgary is pegged to see the highest growth in starts and resale volumes in 2014, with price growth rising within the 2 per cent to 3.5 percent over the next few years.
- Edmonton is expected to see balance, with the median price rising slightly in 2013 – the city’s first gain since 2007.
- Since Vancouver is by far the most expensive housing market in the country, condos remain an affordable option. It’s expected to be a buyer’s market in 2013, with sales and prices picking up in 2014.
- Victoria has the lowest number of starts among the cities and no growth in resale prices or sales until 2014. The city’s high inventory of unsold new units and limited demand due to a soft economy won’t translate into into a revived condo market anytime soon.