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Condo market crash is unlikely

Toronto's hot condo market could slow down if a proposed hike in development charges is approved for next year, developers warn.

TORONTO - The Conference Board of Canada predicts a growing population and continuing, if modest, job growth will prevent condo markets in Canada's major cities from crashing.

Sales are expected to fall everywhere but Edmonton this year, with eight per cent drops anticipated in Toronto and Vancouver.

And the report, released by mortgage insurer Genworth, says rising interest rates will likely further cool the market in 2014.

But an all-out crash is unlikely, even in cities such as Toronto, Montreal and Vancouver where markets are being watched with concern.

The report says that's because a swelling population and a growing number of "condominium-loving empty-nesters" aged 55 and older should support the condo market in all of Canada's major cities as will modest job growth over the medium term.

And it says the banks, which require builders to have pre-sold a certain number of units before they fork over the cash for construction of a new building, will help to prevent an oversupply of condos from flooding the market.

"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 a senior economist at the Conference Board of Canada, in a statement.

"Softer prices and positive economic factors continue to make condos an affordable way for Canadians to achieve home ownership."

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Posted: Thursday, August 29, 2013 6:00 PM by Sutton Realty

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