.
Condominium Market Share Continues to Climb in Major Canadian Real Estate Markets, as More Buyers Seek Affordable Housing Options
Double-Digit Increases to Rental Rates Spark New Wave of Condo Buyers in Alberta
- Buyers from British Columbia and Ontario continue to be active in Alberta’s condominium market.
- The lion’s share of condominium activity is occurring at lower price points. In Toronto, for example, the bulk of condominium apartment sales now hovers in the $500,000–$700,000 range, down from $600,000–$800,000 earlier in the year.
- Condominium markets are losing inventory to an attractive rental market, as would-be sellers simply opt to lease their units long-term.
- Competing offers are still occurring in areas such as Halifax-Dartmouth, although not at the same pace as earlier in the year.
Condominium market share has grown in major urban Canadian real estate markets yet again this year, a reflection of new market realities and the shifting course of entry-level buyers, according to a new report by RE/MAX Canada.
RE/MAX’s 2022 Canadian Condominium Report examined more than 120 communities in six major markets, including Greater Vancouver/Fraser Valley, Calgary, Edmonton, Greater Toronto, Ottawa and Nova Scotia. The report found that condominium sales were down in the first eight months of 2022 in four markets, including Greater Vancouver/Fraser Valley, Greater Toronto, Ottawa and Nova Scotia, while Calgary and Edmonton reported double-digit sales increases over the same period in 2021. Condo values are up in almost all markets year-over-year, with many bolstered by a robust strong first quarter.
Condominium market share advanced across the board as a proportion of total Canadian real estate sales. Upswings were reported in five out of six markets analyzed, ranging from a low of 0.08 per cent in Ottawa to a high of 6.6 per cent in the Fraser Valley. Compared to year-to-date levels one year ago, condominiums now represent just over 54 per cent of total residential sales in Greater Vancouver, 36.3 per cent of residential sales in the Greater Toronto Area, almost 32 per cent of sales in the Fraser Valley, just over one in four sales in Edmonton and Ottawa, and almost one in five sales in Calgary. Nova Scotia was the only market to register a decline in condominium market share.
“The affordability factor is the key issue in today’s housing market,” says Christopher Alexander, President, RE/MAX Canada. “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. 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. So, while fewer sales have occurred in 2022, condominiums represented a greater proportion of overall sales, as buyers gravitated to affordable options to achieve home ownership.”
The report provides additional context to the recent decline in sales, noting that 2021 marked a year of record sales in almost all markets. Given that a significant amount of buyer demand has been satisfied, and a portion of buyers are waiting it out on the sidelines due to rapid rate increases, the decline in sales in 2022 was not only expected, but the natural course of events.
“Buyers should be cautioned that the current slowdown in sales activity is likely not indicative of a crash,” says Elton Ash, Executive Vice President, RE/MAX Canada. “Prices for condominium product have remained stable or risen in most major urban centres year-to-date. Conditions are balanced overall and, as such, buyers and sellers with realistic expectations should be able to achieve reasonable objectives.”
Buyers, for the most part, have finally been able to take a breath in Canada’s active condominium market, since the heated momentum of recent years has cooled with inflationary pressures, shifting conditions into more balanced territory. That balance has provided a rare window of opportunity for those ready and able to make their moves – from first-time buyers gaining a foothold in the market to move-up buyers and empty-nesters. Evidence of this is occurring across the board.
Regional Canadian Real Estate Highlights
GREATER VANCOUVER & FRASER VALLEY
The condominium market in some communities has held up better than others. Sales in Coquitlam, for example, were off last year’s breakneck pace by just 12.8 per cent, clocking in at just under 1,000 sales in the first eight months of the year, compared to 1,146 during the same period in 2021. Vancouver West also held up well against the changing tide, registering a 12.4-per-cent decline year-over year, with 3,211 versus 3,666 sales one year ago. Surrey North in the Fraser Valley also remained relatively strong, with sales down 11.7 per cent from last year’s record pace. Just over 1,100 apartments were sold between January and August, down by 155 sales from the 1,255 sales recorded one year earlier. More Vancouver condo market insights…
CALGARY
Condominiums ownership continues to resonate with buyers in the city of Calgary. Eleven out of the 12 areas featured in the Calgary report experienced an increase in the number of condominium apartments changing hands, ranging from an upswing of 17.5 per cent in Eau Claire on the low end to an impressive 338.5 per cent rise in sales in Saddle Ridge. More Calgary condo market insights…
EDMONTON
Affordability played a substantial role in the upswing in condominium sales in Edmonton this year. Twenty-two of the 26 markets highlighted in the report experienced an increase in home-buying activity, with sales up two per cent in Queen Mary Park to 112 per cent in Lymburn. More Edmonton condo market insights…
GREATER TORONTO AREA
Double-digit declines in sales of condominium apartments and townhomes were noted in most 416/905 districts, with the exception of the 416’s Bathurst Manor/Clanton Park (C06) and Yonge-Eglinton-Forest Hill South-Cedarvale-Humewood (C03) as well as the 905’s Halton Hills and Whitby, where sales were off record levels by just 7.5, 8.8, 7.7 and 9.3 per cent respectively. Two areas—Caledon and Orangeville—managed to squeak out an increase, with condominiums sales up a nominal 8.3 per cent in Caledon, while rising a considerable 33.3 per cent in Orangeville. More GTA condo market insights…
OTTAWA
Condominium sales are holding their own, with many buyers returning to the downtown core. While the number of units sold overall were down in the city year-over-year, sales were on par with 2021 levels in Centretown, and two areas – Lowertown Market and Old Ottawa East – were off by just 2.8 and 4.2 per cent respectively. More Ottawa condo market insights…
HALIFAX-DARTMOUTH
While softer detached housing values have detracted some entry-level buyers from condominium ownership in Halifax-Dartmouth, condominiums remain a popular choice for those looking to gain a foothold in the residential market. Overall inventory levels have been an issue in the Halifax-Dartmouth area this year, playing a role in the downturn in condominium sales. Multiple offers are still occurring on some condominium product in key areas of the city. More Nova Scotia condo market insights…
“Despite the recent shift to a more sustainable pace of sales, Canadian real estate continues to demonstrate some resilience,” notes Alexander. “The factors at play that have served to moderate demand are temporary variables. All boats rise and fall with the tide. Condominium sales activity is expected to rebound in 2023 and 2024 as interest rates begin to stabilize or decline. 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.”
Canadian real estate market sees higher share of condos in 2021, in wake of rising detached housing values; affordability shifts demand for condominiums into high gear in 2021
Staggering gains in detached housing values have sent condominium sales soaring throughout the first eight months of 2021 in major Canadian real estate markets, according to a new report by RE/MAX Canada
The RE/MAX Canada 2021 Condominium Report, which examines trends and developments in five major Canadian real estate markets and more than 100 sub-markets, found that buyers turned to condominiums in 2021, as freehold housing values escalated beyond their reach. The strongest gains in sales were made in the West, where Greater Vancouver and Calgary saw condominium sales rise 87 and 83 per cent respectively between January 1 and August 31 of 2021, compared to the same period in 2020, which experienced a notable downturn in condo sales. The Greater Toronto Area (GTA) led the East in terms of percentage increases in condo sales at 71 per cent, followed by Halifax-Dartmouth at 36 per cent and Ottawa at 29 per cent. The greatest upswing in pricing occurred in the East, with both Halifax-Dartmouth and Ottawa posting double-digit price gains of 30.0 per cent and 18.0 per cent respectively. More moderate appreciation was reported in Greater Toronto (seven per cent), Vancouver (6.7 per cent) and Calgary (three per cent).
“Affordability, coupled with availability, set the stage for the exceptional rebound in condominium sales across Canadian real estate markets in 2021,” says Christopher Alexander, Senior Vice President, RE/MAX Canada. “Double-digit acceleration in detached housing values revived slumping condominium sales early in the year, with demand shifting into high gear as detached supply dwindled and prices accelerated. Younger buyers have been behind the push for condominiums to date, with most looking to lock in low interest rates and buy before prices climb beyond their means.”
Growth in condo market share across the Canadian real estate market occurred in all but one regions surveyed, according to the RE/MAX Canada 2021 Condominium Report. The greatest concentration of condo sales was reported in Greater Vancouver, where condos represented nearly half (48.2 per cent) of total residential sales in 2021, up from 46 per cent one year ago. Condominium apartments and townhomes in the GTA followed with a 34.5 per cent share of the overall market, up from 30.8 per cent one year earlier. Almost one in four properties sold in Ottawa between January 1 and August 31, 2021 was a condominium, compared to the same period in 2020 (24.3 per cent versus 23.3 per cent). Meanwhile in Halifax-Dartmouth, the condominium segment represented 17.3 per cent of total residential sales, up from 15 per cent one year earlier. While overall sales climbed in Calgary year-over-year, condominium market share declined by just under one per cent in 2021, to 14.2 per cent.
“Home-buying activity in the condominium segment has surged in Calgary in 2021, driven in large part by their affordable price point,” says Elton Ash, Executive Vice President at RE/MAX Canada. “Supply has declined from almost eight months to just under five year-over-year, although inventory levels are still 16 per cent ahead of 2020 levels. Once excess product is absorbed – and that is occurring at a steady pace throughout the city – condominium values are likely to experience further appreciation, especially as the average price for detached housing continues to climb in the city.”
Regional Canadian Real Estate Insights
GREATER VANCOUVER CONDO MARKET TRENDS
While strong demand has contributed to a significant uptick in condominium apartment sales in the Greater Vancouver Area, more moderate gains have been reported in terms of price in 2021. According to the Real Estate Board of Greater Vancouver (REBGV), the average price of a condominium apartment hovered at $740,221 in August of 2021, an increase of 6.7 per cent over the August 2020 average of $693,691. Read more…
CALGARY CONDO MARKET TRENDS
Condominium apartment sales have soared in Calgary year-to-date as buyers seek to achieve home ownership while interest rates remain low. In the first eight months of the year, almost 2,800 apartment units have changed hands in the city, an increase of 82.6 per cent over the 1,522 units sold during the same period in 2020. Average price has climbed close to three per cent year-to-date, rising from $255,852 in 2020 to $263,480 in 2021. The lion’s share of activity has occurred at the most affordable price points in 2021, with three out of four sales taking place in the $150,000 to $349,999 price range. Read more…
GREATER TORONTO AREA CONDO MARKET TRENDS
After bearing the brunt of the impact of the pandemic on the Greater Toronto Area’s housing market, condominium sales and prices have roared back to life in both the city and suburbs in 2021. Year-to-date sales of condominium apartments and townhomes (January 1 to August 31) have climbed 71 per cent year-over year, to 30,383 units in the GTA, up from 17,760 during the same period in 2020. Average price has experienced a modest increase, with values for apartments and townhomes rising seven per cent to $688,138 year-over-year. Read more…
OTTAWA CONDO MARKET TRENDS
Condominium sales are firing on all cylinders as strong demand and tight inventory levels characterize current market conditions in Ottawa. The rapid escalation of freehold property values over the past year – up almost 28 per cent – has been a major factor in the increasing number of buyers considering the condominium lifestyle. More than 3,500 condominium apartments and townhomes changed hands between January 1 and August 31 of this year, with sales up almost 29 per cent over the same period in 2020. Read more…
HALIFAX-DARTMOUTH CONDO MARKET TRENDS
In-migration from outside the province has bolstered home-buying activity across the board and contributed to a serious uptick in average price in Halifax-Dartmouth and the surrounding areas. Condominium sales increased almost 36 per cent between January 1 and August 31, rising from 716 units in 2020 to 973 units in 2021. Average price has climbed close to 30 per cent year-to-date, now hovering at $398,632. Read more…
.
About the RE/MAX Network
As one of the leading global real estate franchisors, RE/MAX, LLC is a subsidiary of RE/MAX Holdings (NYSE: RMAX) with more than 140,000 agents in almost 9,000 offices with a presence in more than 110 countries and territories. RE/MAX Canada refers to RE/MAX of Western Canada (1998), LLC, RE/MAX Ontario-Atlantic Canada, Inc., and RE/MAX Promotions, Inc., each of which are affiliates of RE/MAX, LLC. Nobody in the world sells more real estate than RE/MAX, as measured by residential transaction sides.
RE/MAX was founded in 1973 by Dave and Gail Liniger, with an innovative, entrepreneurial culture affording its agents and franchisees the flexibility to operate their businesses with great independence. RE/MAX agents have lived, worked and served in their local communities for decades, raising millions of dollars every year for Children’s Miracle Network Hospitals® and other charities. To learn more about RE/MAX, to search home listings or find an agent in your community, please visit remax.ca. For the latest news from RE/MAX Canada, please visit blog.remax.ca.
Forward-looking statements
This report includes “forward-looking statements” within the meaning of the “safe harbour” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “believe,” “intend,” “expect,” “estimate,” “plan,” “outlook,” “project,” and other similar words and expressions that predict or indicate future events or trends that are not statements of historical matters. These forward-looking statements include statements regarding housing market conditions and the Company’s results of operations, performance and growth. Forward-looking statements should not be read as guarantees of future performance or results. Forward-looking statements are based on information available at the time those statements are made and/or management’s good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. These risks and uncertainties include (1) the global COVID-19 pandemic, which has impacted the Company and continues to pose significant and widespread risks to the Company’s business, the Company’s ability to successfully close the anticipated reacquisition and to integrate the reacquired regions into its business, (3) changes in the real estate market or interest rates and availability of financing, (4) changes in business and economic activity in general, (5) the Company’s ability to attract and retain quality franchisees, (6) the Company’s franchisees’ ability to recruit and retain real estate agents and mortgage loan originators, (7) changes in laws and regulations, (8) the Company’s ability to enhance, market, and protect the RE/MAX and Motto Mortgage brands, (9) the Company’s ability to implement its technology initiatives, and (10) fluctuations in foreign currency exchange rates, and those risks and uncertainties described in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission (“SEC”) and similar disclosures in subsequent periodic and current reports filed with the SEC, which are available on the investor relations page of the Company’s website at www.remax.com and on the SEC website at www.sec.gov. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made. Except as required by law, the Company does not intend, and undertakes no duty, to update this information to reflect future events or circumstances.
The post Slowdown on the Horizon for Canadian Condo Market appeared first on RE/MAX Canada.