Toronto predicted to be fifth overall in condo price growth
Real Estate Reporter
The average resale condominium in Toronto is projected to cost $280,175 by the year 2010, up from $239,816 in 2006, according to a new report on the Canadian condo market.
With an expected 16.8 per cent jump in price, Toronto is forecast to be the fifth strongest market in Canada in condo price growth over the next three years, following Edmonton, Calgary, Vancouver and Montreal, states the Metropolitan Condo Outlook report by Genworth Financial Canada.
“People drive along the Gardiner and see all these new condominiums,” says Peter Vukanovich, president of Genworth Financial Canada. “They say, `Wow, this can’t last. Who’s buying all thee things. Why are people buying all these things?’
“The answer is, it’s a balanced market,”
“It’s a balanced market because more and more people are wanting the condominium lifestyle. I call that more of a lock-and-go type of approach. It’s maintenance free, there’s security, you’re close to good restaurants, social activities, theatres, etc.,” he adds.
The report described Toronto’s condo market as “red hot,” noting prices jumped almost 75 per cent between 1994 and 2005.
Sales more than doubled to 17,700 units in 2005 up from 7,100 units in 1995.
“The feverish activity has been the result of pent-up demand that built up during the housing (price) correction of the early 1990s, as well as low mortgage rates, steady employment and wage gains, and brisk population growth,” states the report.
Because active listings have been increasing at an even faster rate than sales, price growth has been more modest as of late, according to Genworth. For 2006 as a whole, resale condominium price growth is projected to come in at 5 per cent, the report states.
New condo starts are expected to fall by 6.3 per cent to 14,500 units in 2007.
Demographic changes bode well for the Toronto’s condo market over the medium term, Genworth says. Toronto’s population is forecast to increase by an average of 1.9 per cent a year from 2007 to 2011, the report notes.
And the share of the 55 to 74 age cohort is projected to rise from 15 per cent in 1987 to 18 per cent in 2011.
“At the same time, the city’s population is aging; and as people age, it becomes natural for them to consider downsizing, allowing them to enjoy maintenance-free living as well as increased security,” it reads.