Posthaste: Canada’s hottest housing markets are slowing — and condos are the Achilles heel

Posthaste: Canada’s hottest housing markets are slowing — and condos are the Achilles heel

Good Morning!

The search for space continues in Canada’s two biggest housing markets.

Home sales in Toronto and Vancouver stayed strong in November, up 24.3% and 22.7% respectively from the same month last year.

But the pace of those gains is slowing, and condos are the Achilles heel.

In Toronto, 8,766 homes sold in November, down from 10,537 sold in October and the 11,051 homes sold at the peak of the pandemic housing surge in September.

While the average price in November was up 13.3% to $955,615 from the year before, it was down from October’s record high of $968,162.

Single-family homes continue to lead the charge, with detached sales up 30%, mostly in the 905 regions outside the city.

“Home buyers continued to take advantage of very low borrowing costs in November, especially those looking to buy some form of single-family home. Competition between buyers for ground-oriented homes has been extremely strong in many neighbourhoods throughout the GTA, which has continued to support double-digit annual rates of price growth,” said Lisa Patel, president of the Toronto Regional Real Estate Board.

The condo market continues to struggle, with listings in the city core almost doubling from this time last year.

Condo sales rose 7.1% overall, but were up only 0.8% in the core. Prices declined 2% overall and 3% in the city.

However, Jason Mercer, TRREB chief market analyst, said this may be a short-term phenomenon. “Once we move into the post-COVID period, we will start to see a resumption of population growth, both from immigration and a return of non-permanent residents. This will lead to an increase in demand for condominium apartments in the ownership and rental markets.”

Vancouver saw similar trends. Sales of detached homes rose 28.6% from the year before and prices climbed 9.4%.

“With more time spent at home, current buyers are reassessing their housing situation in a move towards the suburbs for more space. Conversely Vancouver West condos, which includes downtown Vancouver, saw a whopping 2.5% decrease for the month, said the Real Estate Board of Greater Vancouver.

The Sunshine Coast saw the biggest sales boom, jumping 82.8% from last year.

“While demand remained elevated across the region, home buyer activity was particularly focused in more remote areas like the Sunshine Coast, Gulf Islands and Squamish,” said Colette Gerber, Vancouver board chair. “The rise of work-from-home arrangements and physical distancing policies is causing some home buyers to opt for less densified areas.”

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