US & Canada

Condos have become ‘the last bastion of affordability’ in Canadian cities

 

As per a report by the real estate company Royal LePage, Canada’s residential real estate market was witness to strong, but slowing year-over-year price growth in the fourth quarter of 2017. 

 

Based on a study of 53 markets, the report says that price of a home in Canada increased 10.8% year-over-year to $626,042 in the quarter. Broken down by housing type, the median price of a two-storey home rose 11.1% year-over-year to $741,924, and the median price of a bungalow climbed 7.1% to $522,963.

 

But the company said in its report released last Wednesday that the median price of a condo grew faster than any other housing type studied, rising 14.3% to $420,823 on a year-over-year basis as a result of gains in many of the largest markets.

 

In the Greater Toronto Area, the median price of a condo grew 19.5% year-over-year to $476,421, while in the City of Toronto, the cost of a condo rose 19.6% to $515,578.

 

In Greater Vancouver, condominiums followed a similar pattern during the quarter, rising 20.2% to $651,885, while the median price of a condo unit in the City of Vancouver rose 18.7% to $775,806.

 

In another report based on a study of luxury home sales, Sotheby’s International Realty said sales in the Greater Toronto Area of homes over $1 million in 2017 climbed 5% compared with a year earlier, boosted by condo sales. Sales of condos over $1 million in Canada’s largest city climbed 59 per cent compared with 2016, while sales of those over $4 million rose 82%. 

 

Sotheby’s CEO Brad Henderson said the condo market’s strength lies in the fact that there are very few affordable family homes in the city and surrounding regions, but an increasing numbers of empty-nesters looking to move closer to their kids downtown. “The condo market will continue to be a strong and resilient class of real estate,” Henderson said. “It is a much more affordable opportunity, even in the luxury level, and there is considerable demand.”

 

Calgary saw overall home sales over $1 million increase 11% year-over-year, while sales in the $1 million-plus real estate market increased 20% in Montreal.

 

Meanwhile, Sotheby’s said sales of homes over $1 million in Vancouver fell 5% compared with 2016, while those over $4 million fell by 33%. Royal LePage said the GTA showed signs of slowing as 2017 drew to a close, notably in the single-family detached segment.

 

In the fourth quarter, the median price of a two-storey home and bungalow in Toronto and surrounding area fell by 2.0 and 2.4% respectively on a quarter-over-quarter basis. The company says condos were the only segment to appreciate on a quarter-over-quarter basis among all housing types, rising 1.1% in the final three months of the year. At the same time, the price of two-storey homes and bungalows fell 0.3 and 0.2% quarter-over-quarter, respectively.

 

“To prospective homeowners in our largest cities, condominiums represent the last bastion of affordability,” said Royal LePage president and CEO Phil Soper.

“This is especially true for first-time buyers whose purchasing power has been reduced by tightening mortgage regulations.” 
 

Written by The Realty Paper


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