Report predicts steadily rising condo prices

Tony Wong
Business Reporter TORONTO STAR
Despite an unprecedented influx of new supply on the market, the Toronto condominium sector will continue to do well over the next five years, says a report released today.The price of an average existing condominium should rise from $239,816 to $292,077 in 2011, representing an increase of about 4 per cent annually, says a report by the Conference Board of Canada and Genworth Financial Canada.

“Toronto has seen a record decade of growth and this report shows that the market remains healthy,” said Peter Vukanovich, president of Genworth Financial.

Toronto is forecast to be the third-strongest market in terms of price growth after Calgary and Edmonton.

The 4 per cent forecast is higher than the estimates of some other analysts who have called for a much more moderating trend or even a correction in the market.

The average price increase for a condo at the end of 2006 was 5 per cent.

Demand for condos are forecast to be strong in the medium term because of a number of factors, including immigration, an aging population, and affordability, said the conference board.

Condo starts in Toronto reached a record high of 16,200 units in 2005.

However, starts are expected to fall by 4.6 per cent in 2006 and another 6.3 per cent this year, representing a more balanced resale market.