A soft landing is on the horizon this year for the condominium markets in eight major Canadian cities, according to a Conference Board of Canada report commissioned by Genworth Canada. The recently released Winter 2015 Metropolitan Condo Outlook forecasts modest sales gains in most of the subject cities.
Toronto, Ottawa, Montreal, Quebec City, Victoria and Vancouver are expected to see prices appreciate, while Calgary and Edmonton are expected to see prices dip alongside lower oil prices.
“From a national perspective, these findings support an overall balanced outlook on Canada’s condo markets for 2015, with the exception of certain oil-exposed regions,” said Genworth CEO and president Stuart Levings. “We continue to see evidence that population growth and employment remain key drivers of demand for condos in urban centres.”
The report attributes regional differences in sales and prices to differences in economic conditions, with Toronto and Vancouver poised to witness the strongest GDP growth as Calgary and Edmonton face the weakest growth. Rising inventories in certain cities, along with these divergent economic conditions, are expected to prompt a slight decrease in housing starts in Toronto, Montreal, Calgary and Edmonton. “Decent” population growth is projected to sustain demand in all of the eight cities.
“While the health of the apartment condominium markets varies significantly by region, nowhere do we see a bubble about to burst,” said Robin Wiebe, senior economist at the Centre for Muncipal Studies at the Conference Board of Canada.
- Toronto is projected to see sales and price growth amid positive GDP and employment outlooks as well as continuing healthy population growth. A third consecutive year of declining housing starts is expected to buffer the market from the risk of a significant market correction. The city’s median resale price is forecasted to rise 1.9 per cent, to $325,668, in 2015.
- Vancouver is projected to see sales and price growth as its housing market continues to rebound. High inventories are expected to keep housing starts low. The city’s median resale price is forecasted to rise 2.1 per cent, to $385,859, in 2015, as it continues to be bolstered by offshore demand.
- Montreal is at risk of a “slight” market correction due to intensifying oversupply. The city’s average resale price is forecasted to rise 2.5 per cent, to $277,168, in 2015.
- Calgary is projected to see sales and price declines due to the negative effect lower oil prices will have on GDP and employment. In response, housing starts are also expected to drop. The city’s median resale price is forecasted to decrease 3.3 per cent, to $266,991, in 2015.
- Also affected by lower oil prices, Edmonton is projected to see sales and price declines. The city’s median resale price is forecasted to decrease 4.6 per cent, to $209,359, in 2015.