According to Scotiabank Global Real Estate Trends’ Global Housing Recovery Deepens report, Canada’s housing market is on a cooler, but more sustainable, trajectory this year.
Though regional conditions vary, national house prices continue to climb, up 10 per cent year-over-year in the first quarter of 2014.
A lack of inventory in the single-family home sector has continued to cause affordability issues, buoying the condo market in metropolitan areas such as Toronto and Calgary.
The report states that “buyers have more leverage in the more-amply supplied condominium market, notably in Toronto where prices are posting moderate increases even amid strong demand. As a result, the price premium for a single-family home relative to a condominium continues to widen.”
As sales moderate, analysts attribute this trend to a variety of factors, including:
- Weaker job growth
- Lower housing affordability
- A widening gap between the cost of owning versus renting
Looking forward, Scotiabank says that the strained single-family home market will continue to support the resale condominium market, particularly for first-time homebuyers. The new condominium market, bolstered largely by investors, is expected to remain soft.
