Metropolitan Condo Outlook Winter 2010

Transcription

Metropolitan Condo Outlook Winter 2010
Insights Into the Apartment
Condominium Market in Eight
Large Canadian Metropolitan Areas
ECONOMIC PERFORMANCE AND TRENDS
Metropolitan Condo Outlook: Insights Into the Apartment Condominium Market in Eight Large Canadian
Metropolitan Areas
by Jane McIntyre and Robin Wiebe
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Preface
This report from The Conference Board of Canada and
Genworth Financial Canada offers an in-depth analysis of
the condominium market for eight large Canadian census
metropolitan areas (CMAs). The report covers a wide
range of condominium market statistics, such as starts,
completions, absorptions, and prices. The main goal of
this publication is to analyze the recent trends in the
condo market in each of the eight CMAs, as well as
where each of the eight markets is heading over the
next five years.
The eight census metropolitan areas covered are Québec
City, Montréal, Ottawa, Toronto, Calgary, Edmonton,
Vancouver, and Victoria.
This report is published twice a year, in summer
and winter.
Contents
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Québec City . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
Montréal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Ottawa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Toronto . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Calgary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Edmonton . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Vancouver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Victoria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Definitions and Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Standard Geographical Classification (SGC) 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
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Executive Summary
Projected employment gains and
moderate mortgage interest rates
are expected to underpin decent
near-term demand for apartment
condominiums in all eight cities
covered in this report. On the supply
side, inventories of both new and
existing units are either falling or
generally well contained in most
markets. Longer term, demographics
are mainly favourable: population
growth broadly consistent with
historical averages will continue in
most cities, with the condominiumoriented cohort aged 55 and over
rising substantially faster.
Such economic optimism contrasts with the past two years’ gloomy
backdrop. Gross domestic product
(GDP) growth slowed in all eight
markets during 2008 and declined
everywhere in 2009. Erosion ranged
from Québec City’s 0.2 per cent
easing to 2.3 per cent tumbles in
Calgary and Toronto. Employment,
vital to housing demand, advanced
more slowly in most markets during
2008 and fell everywhere in 2009.
Last year’s losses ranged from a
negligible 0.1 per cent in Québec
City to 5.2 per cent in Victoria.
Falling mortgage interest rates were
also symptomatic of economic softness, but they did improve affordability. Posted rates for a five-year
term averaged 5.69 per cent during
2009, down from 7.06 per cent a
year earlier. This cut $207 from the
monthly payment on a $250,000
mortgage—roughly the average of
our eight cities’ median or average
condominium prices—amortized
over 25 years.
An improving economy in 2010
should establish a much better tone
for condominium markets. GDP is
forecast to rise everywhere during
2010, led by Vancouver’s 4.5 per cent
expansion. Even 2010’s expected
laggard, Montréal, will see 2.5 per
cent growth, the city’s best since
2002. Equally important, ubiquitous
job gains will range from 0.1 per
cent in Edmonton to 1.7 per cent in
Toronto. And, while mortgage rates
are expected to rise fractionally, the
five-year rate, for instance, is still
forecast to average below 6 per cent
this year, only the third such reading
in the last 20 years.
Buyers, emboldened by such
favourable conditions, are poised
to lift 2010 sales of existing condominium apartments in all cities
Table 1—Apartment Condo Indicators
Starts
Resale sales
Resale price ($)*
2009
2010f
2011f
2009
2010f
2011f
2009
2010f
2011f
Québec City
1,298
16.8
2,085
12.2
2,077
–0.4
180,610
6.5
186,873
3.5
191,992
2.7
7,452
–6.9
867
–3.4
6,205
–6.4
1,067
6.3
15,774
25.3
1,464
46.1
1,378
38.2
6,303
27.1
459
58.8
1,858
4.4
Montréal
897
–30.9
6,628
–11.1
1,005
8.4
12,586
14.9
1,002
161.6
997
120.1
4,960
110.6
289
107.8
12,190
5.6
13,052
7.1
13,289
1.8
225,755
4.1
234,800
4.0
239,099
1.8
1,461
4.3
1,568
7.4
1,616
3.0
215,144
4.2
222,536
3.4
226,652
1.8
21,170
16.1
23,198
9.6
23,796
2.6
252,236
5.1
270,949
7.4
276,726
2.1
4,042
16.6
3,975
–1.7
4,090
2.9
237,505
–7.8
242,477
2.1
247,353
2.0
2,979
5.7
3,477
16.7
3,567
2.6
215,146
–6.9
219,717
2.1
224,765
2.3
15,314
39.0
17,169
12.1
17,742
3.3
332,180
–1.3
355,559
7.0
366,122
3.0
2,244
26.1
2,663
18.7
2,674
0.4
282,726
–0.9
310,952
10.0
320,910
3.2
Ottawa
Toronto
Calgary
Edmonton
Vancouver
Victoria
927
–38.2
10,954
–50.8
383
–92.8
453
–81.9
2,355
–79.5
139
–85.0
*Resale prices are the median everywhere, except in Québec City and Montréal, where they are the average.
Resale sales and average prices in Montréal and Québec City include all condominium styles, not just apartments.
Italics indicate percentage change.
Sources: The Conference Board of Canada; CMHC Housing Time Series Database; Canadian Real Estate Association; Quebec Federation of
Real Estate Boards.
2
The Conference Board of Canada /Genworth Financial Canada
except Calgary. Victoria will see
the largest sales increase, at 19 per
cent, on the heels of a 26 per cent
gain in 2009. Calgary’s 2 per cent
volume decrease will nonetheless
leave condominium sales near a
still-strong 4,000 units. Brisk sales
expansion is forecast in both Toronto
and Vancouver, Canada’s two largest
condominium markets.
Accelerated purchases will begin
to clear active listings inventories,
improving most cities’ market balances. Indeed, fewer active listings
are forecast on average in 2010 than
in 2008 everywhere but Québec City
and Montréal. This will contribute
to rising sales-to-active-listings
ratios in all markets except Québec
City. Balanced markets will reign
everywhere in 2010, with Toronto’s
pack-leading sales-to-active-listings
ratio of 40.4 per cent verging on
sellers’ conditions. Montréal’s forecast 11.9 per cent ratio, this year’s
lowest, still indicates a balanced
market.
Expectations of such balance
underpin our general prediction of
modest price increases, although
Toronto and the British Columbia
cities will see larger advances.
Indeed, Victoria’s median price is
expected to rise 10 per cent in 2010.
By contrast, price hikes nearer 2 per
cent are projected for the Alberta
cities. Vancouver remains Canada’s
most expensive apartment condominium market, with a 2010 median
price forecast near $355,560. By
contrast, an average price of $186,870
is forecast for Québec City.
Markets for new condominium
apartments in most cities face large
backlogs of completed and unoccupied units that must be depleted if
new construction is to rebound.
Boom-town hangovers are present
in Calgary and Edmonton, but 2009
inventories were above 2007 levels
in four other markets too. Only
Montréal and Toronto experienced
lower inventories. Decent absorption
volumes will begin drawing down
builder stocks in six of our eight
markets: only Toronto and Ottawa
are expected to see inventories swell
significantly.
Falling unit stockpiles should
energize apartment condominium
starts, following declines in all
markets except Québec City during
2009. Starts are expected to rise
everywhere but Québec City and
Montreal in 2010. Calgary will see
the largest relative gain, with starts
nearly tripling. Edmonton, Vancouver,
and Victoria, meanwhile, will see
starts at least double. Despite such
hikes, projected activity remains
below 2008 levels in all markets.
A growing and aging population
in all markets will give condominiums solid demographic support in
the medium term. The number of
residents is forecast to rise in all
markets in 2010–2014 with Calgary,
Toronto, and Vancouver posting
total gains of at least 7 per cent.
The cohort aged 55 and over—vital
condominium consumers—will rise
much faster in 2010–2014; doubledigit percentage growth in all eight
cities will be led by Calgary’s 19 per
cent. Such potential demand will lift
average annual starts in 2011–2014
above their 20-year average in all
cities, although none will see its
recent starts peak exceeded.
3
Québec City
Québec City’s apartment condominium market kept growing in
2008 and 2009 despite wider economic weakness. While new construction will drop this year, the resale market will continue to expand.
Looking ahead, both markets will benefit from stable economic growth
and an aging population.
Between 2004 and 2007, unit
sales of existing condominiums in
Québec City rose by an average of
12.6 per cent per year, buoyed by
low interest rates and a rising share
of the population 55 and over—a
prime buyer of condominiums. The
increase in demand in the resale
market kept price growth strong as
well. Significant declines in active
listings in the last half of the 1990s
through 2002 had already resulted
in faster price growth: over 2002
and 2003, average prices rose by
a vigorous 17.1 per cent annually.
With the higher demand, prices
grew by an additional 8.6 per cent,
on an average annual basis, from
2004 to 2007. This growth was
enough to bring additional sellers
into the market, helping to reduce
the sales-to-active-listings ratio
from 28.7 per cent in 2002 to
13.4 per cent by 2006.
By 2008, the global recession was
taking hold, putting a damper on the
resale condominium market, and
pulling unit sales down by 2.5 per
cent for the year as a whole. But
an 11.7 per cent drop in active listings helped prices climb another
8.5 per cent.
Despite the years of strong price
growth (resale condominium prices
reached nearly $170,000 by 2008,
more than double their level at the
start of the decade), the resale condominium market was still one of
the cheapest housing options for
buyers in a year of tough choices.
Indeed, from 2004 to 2008, average
resale condominium prices actually
slipped in relative terms—from
90.7 per cent of total resale prices
to 86.6 per cent. Accordingly, the
resale condominium market bounced
back strongly as the general economy
started to recover. Sales came roaring
back in the final three quarters of
2009, ending the year up 4.4 per cent
overall. This strength is expected to
Chart 1—Share of Population by Age Cohort
15−24
25−39
40−45
55−74
Unit sales will pause in 2011
before continuing to grow through the
medium term, in line with sustained
economic growth and a rising share
of the population aged 55 and over.
However, active listings will increase
even faster, pulling the sales-to-activelistings ratio down to 11.6 per cent
by the end of the forecast (2014),
and holding price growth to just
2.8 per cent per year on average.
While Québec City’s resale condominium market was thriving over
2004 to 2007, its new condominium
market was beginning to weaken.
Starts had increased rapidly from
2001 to 2004, reaching nearly
1,200 units—more than the market
could absorb. As a result, the number
of newly completed but unabsorbed
units increased from just 40 units in
Chart 2—Apartment Condo Construction
Apartment condo starts (units—left)
75+
Starts as a per cent of multiple starts (right)
30
25
20
15
10
5
1,500
50
1,200
40
900
30
600
20
300
10
0
0
1990
2002
2014f
Sources: The Conference Board of Canada; Statistics Canada.
4
spill over into 2010 as well, pushing
sales up by 12.2 per cent this year.
But as listings increase, price growth
will keep slowing—from 6.5 per cent
last year to 3.5 per cent in 2010.
0
1995 97 99 01 03 05 07 09 11f 13f
Sources: The Conference Board of Canada; CMHC Housing Time
Series Database.
2001 to 150 units by 2004. As a
result, builders reduced starts by
nearly 40 per cent over the following three years, bringing them back
down to 729 units by 2007.
The new market bounced back
in 2008 and 2009, with starts reaching nearly 1,300 units last year. But
inventories increased as absorptions
failed to keep pace. This is expected
to result in a 30.9 per cent decline in
Chart 3—Affordability and
Condo Sales
starts this year and further decreases
over the next two years. Starts are
forecast to grow again in the outer
years of the outlook, in line with
the sound economy and the aging
population.
Chart 4—Sales to Active Listings
and Price Change
Per cent of household income spent on mortgage (left)
Sales−to−active−listings ratio (per cent—left)
Existing apartment condo sales (units—right)
Average price growth (per cent—right)
25
20
15
10
5
0
−5
−10
30
25
20
15
10
5
0
−5
2,500
2,000
1,500
1,000
500
0
20
16
12
8
4
0
1995 97 99 01 03 05 07 09 11f 13f
1996 98 00 02 04 06 08 10f 12f 14f
Sources: The Conference Board of Canada; Quebec Federation of
Real Estate Boards.
Real Estate Boards.
Table 1—Resale Condominium Market
2007
Unit sales
Active listings
Months’ supply
Average price
2008
2009
2010f
2011f
2012f
2013f
2014f
1,824
17.8
1,779
–2.5
1,858
4.4
2,085
12.2
2,077
–0.4
2,123
2.2
2,198
3.5
2,255
2.6
910
–5.7
7.2
156,301
11.6
803
–11.7
5.8
169,656
8.5
843
4.9
1,080
28.1
974
–9.8
6.0
191,992
2.7
1,173
20.4
1,420
21.1
1,614
13.6
5.8
6.9
180,610
6.5
186,873
3.5
6.9
8.0
9.0
198,129
3.2
203,794
2.9
208,861
2.5
Sources: The Conference Board of Canada; CMHC Housing Time Series Database; Quebec Federation of Real Estate Boards.
Table 2—New Condominium Apartment Market
2007
Starts
Under construction
Completions
Complete and not absorbed
Absorptions
Months’ supply
729
–28.9
457
–21.1
770
–35.8
221
–15.1
876
–25.2
3.0
2008
2009
2010f
1,111
52.4
1,298
16.8
676
48.1
967
25.6
178
–19.7
952
8.7
2.2
674
–0.3
1,203
24.4
244
37.1
1,126
18.2
2.6
897
–30.9
758
12.4
835
–30.6
216
–11.5
936
–16.9
2.8
2011f
867
–3.4
679
–10.4
823
–1.4
149
–31.0
854
–8.7
2.1
2012f
796
–8.1
717
5.7
815
–1.0
165
10.9
784
–8.2
2.5
2013f
2014f
821
3.1
867
5.5
717
–0.1
821
0.8
191
16.0
797
1.7
2.9
723
0.9
834
1.5
215
12.2
812
1.8
3.2
5
Montréal
As Montréal’s economy continues to recover from the global recession this year, sales of existing condominiums will increase by 7.1 per
cent. But starts are expected to decline for the fifth time in six years, as
builders try to reduce still high inventory levels.
The year 2008 marked the end
of a significant period of growth in
Montréal’s resale condominium market. Unit sales rose from 1,800 units
in 1996 to 11,600 in 2007, an average
increase of 17.3 per cent per year.
Sales were driven by the increasing
popularity of condominiums as a
housing option, as well as sound
personal income and low interest
rates starting in 2001. At first, sellers
did not respond to the marked
increase in demand. As a result, the
sales-to-active-listings ratio rose from
4.1 per cent in 1996 to 33.7 per cent
by 2002. But as the market tightened,
prices began to increase at a faster
pace, growing by an annual average of
nearly 11 per cent between 2002 and
2007, to over $210,000. Accordingly,
sellers became interested, driving
up active listings and bringing the
sales-to-active-listings ratio back
down to 13.9 per cent in 2007.
Buyers paused briefly in 2008
as the threat of a global recession
materialized, reducing unit sales
through the last half of the year and
into the first quarter of 2009. Prices
took a breather as well, rising just
1.5 per cent in 2008. This slower
price growth was enough to bring
condominium prices to an all-time low
compared with overall resale housing prices in Montréal, at 83.7 per
cent. Relative affordability may be
one reason why the market picked
up again so fast in 2009, even before
overall economic growth had a chance
to recover. In fact, by the second
quarter of last year, unit sales were
once again rising, increasing by a
total of 5.6 per cent last year.
Unit sales of condominiums are
expected to rise a further 7.1 per cent
this year as economic growth in the
region continues to improve. Active
listings will also rise, helping to keep
the sales-to-active-listings ratio near
12 per cent, and holding resale price
growth to 4 per cent. Over the medium
term, modest annual average price
15−24
25−39
40−45
55−74
The outlook is not as good for
the new apartment condominium
market. Pent-up demand, good economic growth, and lower interest
rates had also kept the new market
hot from 1996 through to 2004,
with starts rising by an incredible
annual average of 26.5 per cent,
from 1,300 to 9,300 units. But by
2005, with months’ supply on the
upswing (the number of newly
completed but unabsorbed units
rose an annual average of 30.1 per
cent from 2001 to 2004), builders
began to retreat from the market.
Starts fell by an average of 9.9 per
cent per year from 2005 to 2007.
With inventories having finally
fallen in 2007 and economic growth
having reached its highest rate in
five years, builders came back to the
market the following year, increasing
75+
30
25
20
15
10
5
10,000
60
8,000
50
6,000
40
4,000
30
2,000
20
0
0
1990
2002
2014f
6
growth of 2.3 per cent will help keep
the resale condominium market
relatively affordable, allowing unit
sales to climb by an average of
2.4 per cent per year.
10
1995 97 99 01 03 05 07 09 11f 13f
Series Database.
starts by 17.2 per cent in 2008.
Unfortunately, this was happening
just as the recession took hold, and
so weakening demand forced builders
to once again reduce starts in 2009.
Builders will continue to reduce starts
over the next three years as well, in
an effort to bring inventories even
Condo Sales
and Price Change
Average price growth (per cent—right)
15,000
12,000
9,000
6,000
3,000
0
30
25
20
15
10
5
lower. By the end of the forecast
period in 2014, apartment condominium starts in Montréal are expected
to be under 5,700 units, nearly
40 per cent below the 2004 peak.
40
30
30
20
20
10
10
0
0
−10
1995 97 99 01 03 05 07 09 11f 13f
1996 98 00 02 04 06 08 10f 12f 14f
Real Estate Boards.
Real Estate Boards.
Table 1—Resale Condominium Market
Unit sales
Active listings
Months’ supply
Average price
2007
2008
2009
2010f
2011f
2012f
2013f
2014f
11,550
19.1
11,546
0.0
12,190
5.6
13,052
7.1
13,289
1.8
13,662
2.8
13,974
2.3
14,347
2.7
6,931
0.0
7,022
1.3
7,677
9.3
9,129
18.9
8,309
–9.0
9,337
12.4
10,345
10.8
11,173
8.0
8.5
8.0
8.2
9.1
8.0
8.6
9.2
9.7
213,666
5.6
216,906
1.5
225,755
4.1
234,800
4.0
239,099
1.8
246,179
3.0
252,106
2.4
257,610
2.2
2007
2008
2009
2010f
6,628
–11.1
6,396
10.3
6,527
–10.4
1,555
–1.7
6,601
–8.6
2.8
Starts
6,826
–9.9
8,001
17.2
7,452
–6.9
Under construction
5,594
–23.1
7,936
2.1
2,148
–8.3
9,207
43.3
2.8
6,087
8.8
5,799
–4.7
6,418
–19.1
1,711
–20.3
6,778
–26.4
3.0
7,284
13.5
Completions
Absorptions
Months’ supply
1,583
–7.5
7,220
6.5
2.6
2011f
6,205
–6.4
6,134
–4.1
6,057
–7.2
1,495
–3.9
6,118
–7.3
2.9
2012f
5,528
–10.9
5,555
–9.4
5,725
–5.5
1,424
–4.8
5,788
–5.4
3.0
2013f
2014f
5,530
0.0
5,665
2.4
5,214
–6.1
5,126
–1.7
5,505
–3.8
5,583
1.4
1,365
–4.1
1,357
–0.6
5,552
–4.1
5,572
0.4
3.0
2.9
7
Ottawa
The stronger economy is boosting Ottawa’s apartment condominium
markets in 2010. Steady GDP growth through the medium term will
ensure further increases in resale sales to 2014 as well. But starts of
new apartments are forecast to remain stable over the medium term.
Ottawa’s resale apartment condominium market saw very little
growth from 2001 to 2005. Demand
was held back by relative weakness
in the overall economy, which was
pulled down by troubles in the hightech industry. Indeed, in level terms,
unit sales in 2005 were almost
identical to sales in 2000. However,
even before the slowdown in sales,
active listings in the region had been
declining for a few years. Accordingly,
by 2001 the sales-to-active-listings
ratio had risen sharply.
The tightening market led to
stronger price increases starting
around 2000, despite lower demand.
Resale prices increased at an annual
average rate of 12.9 per cent from
2000 to 2004. This encouraged sellers
to come back to the market, bringing
the sales-to-active-listings ratio back
down to 23 per cent by 2005.
While Ottawa did not escape the
global recession unscathed, it still
managed to post one of the better
results in the country in 2009, thanks
to the continued expansion of the
federal government—the region’s
largest industry. As consumer confidence improved, demand for apartment
15−24
25−39
40−45
55−74
The sales-to-active-listings ratio
has remained steady over the past
couple of years and is expected to
do so over the medium term as well,
as both unit sales and active listings
increase in line with a sound economy.
Unit sales are forecast to grow by
7.4 per cent this year before averaging
growth of 4.9 per cent per year from
2011 to 2014. Resale price growth
will reach 3.4 per cent in 2010, slowing to an annual average of 1.9 per
cent for the rest of the forecast.
Construction of new apartment
condominiums rose from just 30 starts
in 2000 to a record 1,500 units in
2008. However, the growth in starts
75+
30
1,600
1,400
1,200
1,000
800
600
400
200
0
25
20
15
10
5
0
1990
2002
2014f
8
condominiums increased once more.
Already, by the first quarter of 2009,
the resale apartment condominium
market was showing signs of life.
In the second quarter of last year
alone, unit sales jumped by 31 per
cent. Overall for 2009, unit sales
increased a respectable 4.3 per cent,
while price growth slowed to a still
healthy 4.2 per cent.
By 2006, things were looking
up for Ottawa’s economy, and so
buyers returned to the market. Unit
sales of apartment condominiums
rose by 14.2 per cent that year and
by an additional 11.9 per cent in
2007. Unfortunately, by 2008 the
onset of the global financial crisis
led to a significant loss of consumer
confidence, and so demand in the
resale apartment condominium
market faded once more. The market was also feeling the pinch from
years of strong price growth. By
2008, monthly mortgage payments
as a share of household income in
the region were nearly 14 per cent,
up sharply from 8.4 per cent in
2000. As a result, sales slipped
7.9 per cent in 2008.
40
35
30
25
20
15
10
5
0
1995 97 99 01 03 05 07 09 11f 13f
Series Database.
was accompanied by an increase in
the number of newly completed but
unoccupied units as well. And so, as
uncertainty over the economy loomed
in late 2008, builders retreated from
the market, allowing starts to tumble
by 38.2 per cent last year, back down
to 930 units.
But rebounding economic growth
will prompt apartment condominium
Apartment Condo Sales
starts to rise by a projected 8.4 per
cent to 1,000 units in 2010. Starts
are expected to stabilize around this
level over the rest of the forecast
period, averaging 1,040 units over
2011 to 2014.
and Price Change
Median price growth (per cent—right)
200
150
100
50
0
−50
−100
2,000
1,600
1,200
800
400
0
30
25
20
15
10
5
25
20
15
10
5
0
−5
2002 03 04 05 06 07 08 09 10f 11f 12f 13f 14f
1996 98 00 02 04 06 08 10f 12f 14f
Sources: The Conference Board of Canada; Canadian Real
Estate Association.
Estate Association.
Table 1—Resale Condominium Apartment Market
2007
Unit sales
Active listings
Months’ supply
Median price
2008
2009
2010f
2011f
2012f
2013f
2014f
1,520
11.9
1,400
–7.9
1,461
4.3
1,568
7.4
1,616
3.0
1,707
5.6
1,797
5.3
1,898
5.6
379
–13.2
3.5
186,975
6.6
392
3.4
367
–6.3
3.1
215,144
4.2
388
5.6
386
–0.5
3.1
226,652
1.8
407
5.4
435
7.0
460
5.8
3.4
206,558
10.5
3.1
222,536
3.4
3.1
3.1
3.1
230,194
1.6
234,795
2.0
239,513
2.0
2013f
2014f
Sources: The Conference Board of Canada; CMHC Housing Time Series Database; Canadian Real Estate Association.
2007
Starts
Under construction
Completions
Absorptions
Months’ supply
1,057
–10.7
1,536
20.3
1,200
68.5
183
145.0
1,056
45.7
2.1
2008
1,501
42.0
1,806
17.6
1,047
–12.8
164
–10.1
1,123
6.3
1.8
2009
2010f
2011f
927
–38.2
1,875
3.8
1,452
38.7
275
67.4
961
–14.4
3.4
1,005
8.4
1,067
6.3
1,042
–2.4
1,047
0.4
1,000
–4.5
2,377
26.8
2,939
23.6
1,084
–25.4
463
68.8
1,380
43.6
4.0
1,079
–0.4
1,727
–41.2
1,085
0.5
182
–15.2
1,107
–9.6
2.0
1,367
–20.8
1,081
–0.4
171
–5.9
1,082
–2.2
1.9
1,191
–12.9
1,075
–0.5
183
7.0
1,050
–2.9
2.1
215
–53.7
1,225
–11.2
2.1
2012f
9
Toronto
As Toronto’s economy emerges from the recession this year, unit
sales of existing apartment condominiums are forecast to increase by
9.6 per cent while starts rise by 14.9 per cent. Further economic
improvement, along with sound demographics, will keep these markets
growing over the medium term.
The year 2008 marked the end of
a remarkable 12-year growth spurt
in Toronto’s resale apartment condominium market. From 1996 to
2007, unit sales rose by an average
of 10.1 per cent per year, to reach
21,500 units—about three times their
mid-1990s level. Sales were boosted
initially by a stretch of solid economic growth and pent-up demand
from the previous decade, and later
by lower interest rates. Demand
drove up median apartment prices
by an average of 7.7 per cent annually from 1997 to 2002. In turn, this
encouraged more sellers to enter
the resale market, driving down the
sales-to-active-listings ratio from
41 per cent in the late 1990s to
27.5 per cent by 2006.
Although price growth slowed,
in line with looser market conditions,
it still averaged a robust 5.2 per cent
per year from 2003 to 2007. Despite
the elevated prices (median apartment
prices topped $230,800 in 2007),
resale apartment condominiums were
still one of the most affordable options
for Toronto buyers. Thanks to growth
in all areas of the housing market,
apartment condominium prices
remained nearly 40 per cent cheaper
than overall resale home prices.
A weakening economy and the
City of Toronto’s new land transfer
tax took their toll on the housing
market in 2008. Unit sales of apartment condominiums dropped 15.1 per
cent that year, while median price
growth slipped to a still decent 4 per
cent. But the downturn was shortlived. As signs of an economic
recovery emerged, this market was
one of the quickest to recover, thanks
in particular to very low mortgage
rates. Unit sales increased rapidly
in the final three quarters of 2009,
posting growth of 16.1 per cent for
the year as a whole. Much healthier
economic growth in 2010 will spur
15−24
25−39
40−45
55−74
This market is expected to keep
growing over the medium term,
bolstered by even stronger gains
in the economy, as well as fairly
strong population growth and an
increasing share of the population
55 and older—a prime market for
this type of real estate. Unit sales
are forecast to grow by 3.5 per cent
on an average annual basis from
2011 to 2014. Meanwhile, a declining sales-to-active-listings ratio is
expected to lead to average growth
in median prices of just 1.9 per cent
per year over the same period.
Like the resale apartment condominium market, the new apartment
condominium market has also been
growing strongly. Construction
began on over 22,000 units in 2008,
up from just 2,300 units in 1996.
75+
30
24,000
20,000
16,000
12,000
8,000
4,000
0
25
20
15
10
5
0
1990
2002
2014f
10
further increases in unit sales, which
are expected to rise by 9.6 per cent.
At the same time, median apartment
price growth is forecast to improve
to 7.4 per cent.
120
100
80
60
40
20
0
1995 97 99 01 03 05 07 09 11f 13f
Series Database.
The record number of starts in 2008
occurred despite the looming recession, as builders had the advantage
of a number of pre-sales for developments in the downtown core. But
once the recession hit full force,
starts fell by a whopping 50.8 per
cent last year, as construction began
on fewer than 11,000 units.
The continued economic recovery
is expected to encourage builders to
start an additional 14.9 per cent new
units this year and 25.3 per cent
more in 2011. Starts will then average
growth of 5.5 per cent per year from
2012 to 2014, thanks to strong economic growth and sound demographic
fundamentals, which bode well for
continued condominium building in the
downtown core in the coming years.
and Price Change
60
50
40
30
20
10
0
30,000
25,000
20,000
15,000
10,000
5,000
0
24
20
16
12
8
4
0
12
8
4
0
−4
−8
−12
1995 97 99 01 03 05 07 09 11f 13f
1996 98 00 02 04 06 08 10f 12f 14f
Estate Association.
Estate Association.
Unit sales
Active listings
Months’ supply
Median price
2007
2008
2009
2010f
2011f
2012f
2013f
2014f
21,482
17.0
18,235
–15.1
21,170
16.1
23,198
9.6
23,796
2.6
24,604
3.4
25,677
4.4
26,608
3.6
4,863
–12.7
3.1
230,825
8.1
5,161
6.1
4,329
–16.1
2.6
252,236
5.1
4,787
10.6
4,878
1.9
5,219
7.0
5,637
8.0
6,021
6.8
3.3
240,042
4.0
2.7
2.7
2.7
2.8
2.9
270,949
7.4
276,726
2.1
281,609
1.8
287,496
2.1
292,694
1.8
Starts
Under construction
Completions
Absorptions
Months’ supply
2007
2008
2009
2010f
2011f
2012f
2013f
2014f
9,396
–29.6
25,563
3.0
7,528
–44.6
357
–40.0
8,053
–39.9
0.5
22,244
136.7
10,954
–50.8
12,586
14.9
15,774
25.3
17,748
12.5
18,158
2.3
18,464
1.7
31,874
24.7
35,189
10.4
25,390
–27.8
20,654
–18.7
19,483
–5.7
19,341
–0.7
19,751
2.1
13,374
77.7
12,212
–8.7
11,938
–2.2
13,939
16.8
15,534
11.4
16,794
8.1
17,720
5.5
233
–34.7
13,288
65.0
0.2
278
19.2
12,211
–8.1
0.3
599
115.5
11,325
–7.3
0.6
615
2.6
899
46.1
15,009
5.3
0.7
1,449
61.2
1,957
35.0
16,218
8.1
17,283
6.6
1.1
1.4
14,254
25.9
0.5
11
Calgary
Calgary’s apartment condominium market is recovering slowly
from a boom-induced hangover. Rising sales of existing units have
eroded swollen inventories and set the stage for modest price advances.
Starts still face significant inventory competition and will remain below
peak levels, despite this year’s impressive percentage rebound.
New apartment condominiums
enjoy improved prospects in 2010,
following a grim 2009. Recessionary
conditions, including a big drop in
oil prices, devastated demand, cutting
annualized new-unit absorptions to
barely 1,600 units in 2009’s third
quarter, well off early 2008 readings
above 5,000 units. As a result, inventories of completed and unoccupied
units skyrocketed. Working through
these backlogs and still-substantial
volumes of units under construction
will occupy developers in 2010.
Thus, while starts are forecast to hit
1,000 units (up from their 16-year
low under 400 units last year) this
is less than one-third the annual
volume in the decade to 2008.
Demographic housing demand
fell as slowing in-migration and the
weakening economy cut population
growth to an estimated 2.1 per cent
in 2009, modest by recent standards.
And, while the population of people
aged 55 or more—many of whom
move into condominiums after
becoming empty nesters—rose significantly faster, this cohort remains
relatively small in Calgary. Still,
continued population growth and
aging will generate condominium
demand. Starts are thus projected
to rise each year over the following
four years, but not to recent peaks.
Supply overhangs have also
plagued Calgary’s resale apartment
condominium market, although its
weakest period seems over. Firming
sales demand is meeting an active
listings supply that has been at least
partially depleted by potential vendors’ discouragement with the weak
market. The supply of active listings
began falling sharply in 2008 and,
by the third quarter of 2009, was
under one-third its level in the first
quarter of 2008. The end of 2009
saw higher listings supply, but continued vendor caution will abet a
15−24
25−39
40−45
55−74
Unsurprisingly, values have suffered. The median apartment price fell
7.8 per cent in 2009, down 13.2 per
cent from its 2007 peak. But ongoing
market firming underpins our forecast of 2.1 per cent price growth
in 2010. Persistent market balance
will keep prices rising moderately,
with the 2007 peak value expected
to be eclipsed by 2014.
75+
35
30
25
20
15
10
5
0
6,000
5,000
4,000
3,000
2,000
1,000
0
1990
2002
2014f
12
10 per cent listings decline in 2010.
Sales, meanwhile, firmed through
2009, ending the year up 17 per
cent. For 2009 as a whole, some
4,000 units exchanged hands, and a
similar level of activity is expected
this year. Improving sales and easing listings restored balance to the
apartment condominium market in
the third and fourth quarters of 2009,
with the sales-to-active-listings ratio
exceeding 40 per cent, the highest
since 2007. This ratio is forecast to
average 36.5 per cent in 2010, up
from 30.7 per cent in 2009. The
resulting balanced market is expected
to prevail through 2014.
120
100
80
60
40
20
0
1995 97 99 01 03 05 07 09 11f 13f
Series Database.
The market’s downturn has
improved affordability, a boom-era
casualty. Monthly principle and
interest payments on Calgary’s
median apartment condominium
peaked in 2007 above $1,700, or
13.1 per cent of average household
income, but by 2009 had dropped
more than $400 and were consuming
only 9.7 per cent of average household income. This year’s small
expected price increase, along with
only a fractional mortgage rate hike,
will keep mortgage payments below
both $1,400 and 10 per cent of household income. Rises in unit prices
and interest rates are forecast to lift
mortgage payments to over $1,900
by 2014, but such payments’ share
of household income will remain
relatively modest at 12.1 per cent.
and Price Change
120
100
80
60
40
20
0
6,000
4,500
20
15
10
5
3,000
1,500
0
0
50
40
30
20
10
0
−10
1995 97 99 01 03 05 07 09 11f 13f
1996 98 00 02 04 06 08 10f 12f 14f
Estate Association.
Estate Association.
Unit sales
Active listings
Months’ supply
Median price
2007
2008
2009
2010f
4,764
21.0
3,467
–27.2
1,813
82.1
5.6
257,637
–5.8
4,042
16.6
3,975
–1.7
4,090
2.9
4,155
1.6
4,257
2.5
4,347
2.1
1,079
–40.5
3.2
237,505
–7.8
973
–9.8
2.9
242,477
2.1
1,054
8.3
1,015
–3.8
981
–3.3
2.9
265,928
3.9
1,026
4.5
276,929
4.1
2013f
2014f
996
186.4
3.2
273,492
21.3
2011f
2012f
3.2
3.0
247,353
2.0
255,930
3.5
2013f
2014f
2.9
2007
Starts
Under construction
Completions
Absorptions
Months’ supply
3,340
–20.9
6,351
17.9
1,926
–31.0
10
110.5
1,904
–33.1
0.1
2008
5,335
59.7
8,360
31.6
4,619
139.8
55
450.0
4,568
139.9
0.1
2009
2010f
383
–92.8
5,355
–35.9
2,164
–53.2
275
399.1
1,921
–58.0
1.7
1,002
161.6
3,670
–31.5
2,275
5.1
277
1.1
2,286
19.0
1.5
2011f
2012f
1,464
46.1
1,871
27.8
2,100
12.2
2,434
15.9
2,679
–27.0
2,363
3.9
226
–18.6
2,433
6.4
1.1
2,512
–6.2
2,704
7.6
2,882
6.6
2,448
3.6
2,522
3.0
2,581
2.3
304
34.7
2,354
–3.2
1.6
372
22.2
2,468
4.8
1.8
411
10.5
2,551
3.4
1.9
13
Edmonton
Edmonton’s real estate party is a memory—the cleanup is in
progress. This includes clearing inventories of new and existing apartment condominiums so new construction and price growth can
resume. The process will proceed throughout our forecast, leaving
starts and median price growth modest by recent standards.
The all-time high of 800-plus
unabsorbed—neither sold nor rented—
new condominium units hit in 2009’s
fourth quarter was a potent signal to
Edmonton condominium developers
to limit new construction. Such builder
stocks have increased incredibly from
nearly nil in mid-2007 and chiefly
reflect the unsustainable condominium
starts of the mid-2000s, because new
unit absorption has also been strong.
Unsurprisingly then, condominium
starts fell sharply to 453 units last
year, the fewest since 1996. The
second quarter’s annualized volume
near 120 starts was the lowest in
nearly 16 years. Starts did subsequently pick up, providing modest
optimism as 2010 dawned. Last
year’s construction plunge will
allow inventory reductions, despite
ongoing and forecast easing in absorptions. Such stock drawdowns will help
steel nervous developers, prompting
some to resume stalled projects and
others to launch new ones. Still, while
a starts rebound to nearly 1,000 units
is forecast for 2010, this level remains
well off the annual average of
2,320 units started in 2000–2009.
Edmonton’s condominium boom
was driven largely by overall population growth, since these units’ typical
clientele of those aged 55+ is relatively small locally. Continued, albeit
slower, population increases predicted for 2011–2014 will bolster
demographic demand, prompting
modest increases in starts.
Vigour is seeping back into the
local resale market for apartment
condominiums following several
tough quarters. Slowly rebounding
sales, up each quarter from the trough
in the first quarter of 2009, are
gradually consuming bloated listings
backlogs. Market firming is forecast
to continue, with a 17 per cent sales
hike to near 3,500 units in 2010,
but the mid-decade’s sellers’ market
15−24
25−39
40−45
55−74
Many condominium vendors
who sought to sail with the strong
market were marooned by sales’
falling tide. Active listings floated
above 2,000 units in 2008’s first
half before rising sales and vendor
discouragement slightly drained
supply. Levels remain high, though:
despite last year’s 28 per cent decline,
active listings were 80 per cent above
the past decade’s average watermark.
As a result, the sales-to-active-listings
ratio sagged to an 11-year low in
spring 2008 and has since improved
only fitfully. Rising sales are forecast
to only modestly outpace listings
growth, keeping this ratio slightly
below a balanced market reading
through 2014.
The resale market’s expected
struggle to achieve balance will be
reflected in relatively small price
increases. Condominium values
75+
30
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
25
20
15
10
5
0
1990
2002
2014f
14
is history. Annual sales hikes forecast in 2011–2014 will nonetheless
keep sales below their 2007 peak.
80
70
60
50
40
30
20
10
0
1995 97 99 01 03 05 07 09 11f 13f
Series Database.
have already corrected sharply: the
median apartment price peaked
above $232,000 in 2007; the 2009
equivalent was closer to $215,000.
Prices are expected to rise 2.1 per
cent in 2010 and average only 2.4
per cent growth in 2011–2014.
Sagging prices have, at least,
improved local apartment affordability, which had significantly
deteriorated during the boom. At its
2007 peak, the monthly mortgage
payment on an average local apartment chomped 14.2 per cent from
Edmonton’s average household
income. By 2009, the nibble was
only 11.2 per cent. Little affordability
change is forecast for 2010, but rising
interest rates and apartment prices
will lift the mortgage payment bite
to 13.6 per cent by 2014.
and Price Change
140
120
100
80
60
40
20
0
5,000
4,000
3,000
2,000
1,000
0
50
40
30
20
10
0
50
40
30
20
10
0
−10
−20
1995 97 99 01 03 05 07 09 11f 13f
1996 98 00 02 04 06 08 10f 12f 14f
Estate Association.
Estate Association.
2007
2008
2009
2010f
Unit sales
4,422
14.9
2,979
5.7
3,477
16.7
3,567
2.6
3,653
2.4
3,745
2.5
3,801
1.5
Active listings
1,421
316.0
2,819
–36.3
1,829
28.7
6.4
231,019
–0.6
1,316
–28.0
4.5
215,146
–6.9
1,199
–8.9
1,213
1.2
1,183
–2.5
1,190
0.6
1,202
1.0
Months’ supply
Median price
5.3
232,353
41.1
2011f
2012f
2013f
2014f
4.2
4.5
4.2
4.0
3.9
219,717
2.1
224,765
2.3
230,441
2.5
236,020
2.4
241,368
2.3
2013f
2014f
2007
Starts
3,856
11.9
Under construction
5,914
22.8
Completions
2,098
–20.3
47
–81.1
2,127
–28.9
0.3
Absorptions
Months’ supply
2008
2,507
–35.0
7,203
21.8
2,366
12.8
130
175.1
2,271
6.8
0.7
2009
2010f
453
–81.9
3,985
–44.7
3,987
68.5
538
313.7
3,316
46.0
1.9
997
120.1
1,971
–50.6
1,436
–64.0
474
–11.9
2,030
–38.8
2.8
2011f
2012f
1,378
38.2
1,675
21.6
1,798
7.3
2,002
11.3
1,463
–25.8
1,691
17.8
109
–76.9
1,846
–9.0
0.7
1,691
15.6
1,927
14.0
2,069
7.3
1,843
9.0
1,929
4.7
1,991
3.2
162
48.1
1,726
–6.5
1.1
273
68.6
1,823
5.6
1.8
367
34.2
1,907
4.7
2.3
15
Vancouver
Vancouver’s apartment condominium market is rapidly regaining
strength after a very soft 2009. Both new unit absorptions and resale
volumes have risen, whittling previously high inventories in both markets and ending price declines. Talk of a bubble seems premature,
since price advances are attracting additional resale supply.
In 2009, Vancouver’s new condominium market crumbled under the
weight of sagging employment, rising
inventories, and competition from
a previously high supply of resale
units. Absorption of new units fell
under 5,800 units annualized in
the third quarter, a three-year low,
while unsold stocks hovered above
600 units—a big jump from fewer
than 100 unsold units in mid-decade.
Developer response included cutting
starts by 80 per cent to 2,355 units,
the fewest since 2000, and suspending
already-started projects.
Signs nonetheless point to a
2010 rebound in new construction.
Brisk employment gains in mid-2009
and low mortgage interest rates contributed to a surge of absorptions in
2009’s fourth quarter. Moreover, low
starts in 2009 foreshadow much
smaller inventories by the end of
2010, even as absorptions flatten.
Developers are dusting off shelved
projects and appear set to more than
double starts to nearly 5,000 units in
2010. Demographics are mildly supportive of new construction. Ongoing
population growth, already above
the 1999–2008 annual average, will
accelerate modestly. But, despite
growth in the population aged 55
or more, empty-nester demand in
Vancouver is limited by the city’s
pricey condominiums. Still, starts
will advance in each year of our forecast, although not to their 2007 peak.
While new construction slowly
picks up speed, Vancouver’s market
for resale condominiums is sprinting, sparking talk of a bubble. But
although some froth is apparent,
firmer pricing is already attracting
fresh listings supply, which should
moderate price increases and thus
bubble symptoms. Resale transactions
accelerated sharply through 2009.
Accordingly, full-year sales rebounded
39 per cent in 2009, following 2008’s
15−24
25−39
40−45
55−74
The supply of active condominium
listings, meanwhile, fell 39 per cent
between 2008’s fourth quarter and
2009’s second, at least partially
because of vendor discouragement
with a weak market. Thus, when
sales picked up, the market quickly
moved from a buyers’ to a solid
balanced position. The sales-toactive-listings ratio, which troughed
at an eight-year low of 12.7 per cent
in 2008’s fourth quarter, was 23.3 per
cent a year later—although the market
remains much more balanced than in
2005, when sales-to-active-listings
neared 47 per cent. Listings growth
is forecast to outpace sales growth
in 2010, but sales will subsequently
run ahead. Still, the resulting salesto-listings ratio will remain below
32 per cent throughout our forecast.
75+
30
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
25
20
15
10
5
0
1990
2002
2014f
16
one-third drop. Sales growth is forecast to throttle back to a more sustainable pace in 2010, but sales will still
end up 12 per cent from 2009. Sales
are forecast to surpass 2002’s record
volume by 2012.
90
80
70
60
50
40
30
20
1995 97 99 01 03 05 07 09 11f 13f
Series Database.
Buyers’ market conditions
prompted price drops during five
consecutive quarters to 2009’s first
quarter. Last spring’s tightening market ended the run. Still, the resulting
1.3 per cent drop in the median price
for apartment condominiums in 2009
contrasted sharply with double-digit
percentage advances in each year
between 2002 and 2007. Our expectation of generally balanced markets
in 2010–2014 includes 7 per cent
price growth in 2010, but much
more moderate rises thereafter.
The 2009 price drop did shave
Vancouver’s mountainous mortgage
payment on the median apartment
condominium. But rising prices and
a modest interest rate uptick will
lift such payments back up to 22 per
cent of average incomes in 2010.
and Price Change
50
40
30
20
10
0
25,000
20,000
15,000
10,000
5,000
0
50
40
30
20
10
0
20
15
10
5
0
−5
1995 97 99 01 03 05 07 09 11f 13f
1996 98 00 02 04 06 08 10f 12f 14f
Estate Association.
Estate Association.
Unit sales
Active listings
Months’ supply
Median price
2007
2008
2009
2010f
2011f
2012f
2013f
2014f
16,387
8.1
11,017
–32.8
15,314
39.0
17,169
12.1
17,742
3.3
18,598
4.8
19,491
4.8
20,296
4.1
3,945
11.0
6,358
61.2
5,005
–21.3
4.2
332,180
–1.3
5,800
15.9
4,835
–16.6
3.8
366,122
3.0
4,867
0.7
5,167
6.2
5,510
6.7
2.9
5.1
329,263
14.3
336,438
2.2
4.6
355,559
7.0
3.4
3.4
3.5
377,795
3.2
391,893
3.7
403,522
3.0
2013f
2014f
2007
2008
2009
2010f
Starts
12,376
39.9
11,496
–7.1
Under construction
15,978
10.8
18,907
18.3
Completions
8,835
9.7
11,689
32.3
163
105.0
8,771
8.4
0.2
346
112.6
11,299
28.8
0.4
2,355
–79.5
13,558
–28.3
9,250
–20.9
590
70.8
9,109
–19.4
0.8
4,960
110.6
8,803
–35.1
5,547
–40.0
501
–15.0
5,908
–35.1
1.0
Absorptions
Months’ supply
2011f
2012f
6,303
27.1
7,273
15.4
8,016
10.2
8,849
10.4
8,550
–2.9
8,557
0.1
8,664
1.2
8,794
1.5
6,154
10.9
6,964
13.2
7,561
8.6
8,098
7.1
176
–64.9
6,258
5.9
0.3
457
159.5
6,559
4.8
0.8
861
88.5
7,160
9.2
1.4
1,244
44.5
7,731
8.0
1.9
17
Victoria
Victoria’s apartment condominium market is recovering from oversupply and recession-induced demand weakness. Clearing of new construction backlogs, along with firming demand for resale units, should
put both markets in a balanced state during 2010. The longer term forecast sees gently rising starts and moderate resale price growth.
remains the highest of this report’s
eight cities and has risen three times
more rapidly than the city’s total
population in the past decade.
Several years of heavy starts
finally satiated Victoria’s condominium appetite. The resulting run-up of
unsold new unit inventories prompted
starts to collapse to 139 units in 2009
following an annual average near
1,140 units in the five years to 2008.
Still, absorptions have remained
healthy and are expected to stay
strong through 2014. This will significantly slice builder stocks in
2010 and 2011, aiding a rebound to
nearly 300 starts in 2010. On the
demand side, local employment
gains in 2010 and 2011, along
with low interest rates should
encourage buyers.
For the medium term, continued
growth in total population and a high
proportion of empty nesters aged
55 or more bolster our expectation
of persistently robust condominium
demand. Indeed, Victoria’s 55+ cohort
The market for existing Victoria
condominiums is also firming; it is
following a stylized pattern in which
rising prices stifle demand, but attract
supply that cools price growth, thus
reducing supply, rekindling demand
and reigniting price advances. In
2009, existing apartment sales staged
a nice rebound from 2008’s five-year
low of 1,779 units. Sales jumped
26 per cent to 2,240 units, near the
2004–2007 average. Encouragingly,
2009’s second half saw transactions
rise nearly 50 per cent from the first
half, providing an optimistic springboard into 2010. Another 19 per cent
sales increase in 2010 will eclipse the
2007 volume peak, with further modest annual gains forecast thereafter.
Active listings hit an all-time
high in 2008, initially because of
vendors’ desire to sell into market
15−24
25−39
40−45
55−74
The 2009 buyers’ market led to
a 0.9 per cent drop in the median
price for condominiums, a dramatic
change from the five annual doubledigit increases in 2003–2007. Still,
price growth resumed in 2009’s
second quarter, following four straight
75+
25
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
20
15
10
5
0
1990
2002
2014f
18
strength during the year’s first half,
and later because of sagging secondhalf sales. The pattern largely reversed
in 2009, with sales improving and
listings generally easing. While active
listings fell 28 per cent in 2009,
their absolute volume remained the
second highest on record. Falling
listings and rising sales boosted the
sales-to-active-listings ratio from
eight-year lows in late 2008 and early
2009 to roughly balanced market
levels by the end of 2009. The supply
of listings is projected to rise 13 per
cent in 2010 as vendors sense the
market firming, and then edge higher
still. Such supply rises will not overwhelm projected demand, leaving the
market in general balance throughout
our forecast.
90
80
70
60
50
40
30
20
10
0
1995 97 99 01 03 05 07 09 11f 13f
Series Database.
quarterly declines. Restored balance
in 2010 will build on this price growth
to lift condominiums’ median price
10 per cent. Subsequent years’ market balance is expected to generate
price increases near 3 per cent.
The 2009 drop in condominium
prices combined with falling interest
rates to cut the principle and interest
payment on the median Victoria
condominium to 19 per cent of
average incomes in 2009. The relief
was welcomed, since, among this
report’s eight cities, such payments
are higher only in Vancouver. In
2010, rising house prices, combined
with a tiny mortgage rate hike, will
boost this payment to 21 per cent,
although its absolute level will
remain below the 2008 peak.
and Price Change
70
60
50
40
30
20
10
0
5,000
4,000
3,000
2,000
1,000
0
30
25
20
15
10
5
25
20
15
10
5
0
−5
−10
1995 97 99 01 03 05 07 09 11f 13f
1996 98 00 02 04 06 08 10f 12f 14f
Estate Association.
Estate Association.
Unit sales
Active listings
Months’ supply
Median price
2007
2008
2009
2010f
2,408
10.7
1,779
–26.1
1,154
40.2
6.4
285,208
3.8
2,244
26.1
2,663
18.7
2,674
0.4
2,715
1.5
2,758
1.6
2,811
1.9
833
–27.8
4.6
282,726
–0.9
938
12.6
5.0
310,952
10.0
945
0.7
947
0.2
961
1.5
976
1.6
823
8.5
4.4
274,738
10.4
2011f
2012f
2013f
2014f
4.8
4.4
4.3
4.3
320,910
3.2
330,957
3.1
341,675
3.2
352,985
3.3
2013f
2014f
2007
Starts
1,413
–1.8
Under construction
2,119
41.7
Completions
909
–0.5
52
151.8
865
–3.5
0.7
Absorptions
Months’ supply
2008
928
–34.3
2,317
9.4
1,019
12.1
181
245.5
844
–2.4
2.6
2009
2010f
139
–85.0
1,170
–49.5
1,559
53.0
306
69.7
1,467
73.8
2.5
289
107.8
910
–22.2
936
–40.0
230
–25.0
1,123
–23.5
2.5
2011f
459
58.8
1,149
26.3
1,002
7.1
87
–62.2
1,094
–2.6
1.0
2012f
617
34.4
1,144
–0.4
1,048
4.6
81
–6.7
1,022
–6.6
1.0
757
22.8
1,161
1.4
1,089
3.9
115
42.3
1,052
2.9
1.3
900
18.8
1,173
1.1
1,118
2.6
154
33.3
1,080
2.7
1.7
19
Definitions and Concepts
Housing starts—Refers to the
beginning of construction work on
a building, usually when the concrete has been poured for the entire
footing around the structure, or at an
equivalent stage where a basement
will not be part of the structure.
Multiple starts—The sum of semidetached starts, row starts, and
apartment and other non-singledetached starts. These starts are
distributed among five tenures:
homeownership, rental, condominium, co-op, and other.
Under construction—Units started
but not completed.
Completions—Units where all the
proposed construction work has
been performed or, in some cases,
where 90 per cent of construction
work has been completed and the
structure is fit for occupancy.
Complete and not absorbed—
Newly completed units that remain
unoccupied.
Absorptions—Newly completed
units sold or rented. Units pre-sold
or pre-leased are not included until
the completion stage.
Months’ supply (new condos)—
The number of months needed to
absorb units that are completed but
not absorbed.
Unit sales—The number of existing
condo apartments sold on the multiple
listing service (MLS).
Active listings—The number of
condo apartments for sale on the
MLS.
Sales-to-active-listings ratio—The
number of condo apartments sold
divided by the number of active
condo apartment listings.
Months’ supply (resale)—The
number of months needed to sell
the current supply of active listings,
based on an average of recent
months’ sales volumes.
Median resale price—The median
resale price is found by ranking all
the sales for resale condo apartments
in a particular city from lowest price
to highest price and picking the
middle sale.
Average resale price—The average
resale condo apartment price in a
particular city, although average
prices in Montréal and Québec City
include all condominium styles, not
just apartments. Data do not generally include figures for new construction sales.
Sources: The Conference Board of Canada; CMHC Housing Time Series Database; Canadian Real Estate Association; Quebec Federation of
Real Estate Boards.
20
Standard Geographical Classification (SGC) 2006
Metropolitan areas with their component census subdivisions
Name
Type
Québec City
Beaumont
Municipality
Boischatel
Municipality
Château-Richer
City
Fossambault-sur-le-Lac
City
Lac-Beauport
Municipality
Lac-Delage
City
Lac-Saint-Joseph
City
L’Ancienne-Lorette
City
L’Ange-Gardien
Parish (Municipality of)
Lévis
City
Notre-Dame-des-Anges
Québec
City
Saint-Augustin-de-Desmaures
City
Sainte-Brigitte-de-Laval
Municipality
Sainte-Catherine-de-la-Jacques-Cartier
City
Sainte-Famille
Sainte-Pétronille
Village
Saint-François-de-l’Île-d’Orléans
Municipality
Saint-Gabriel-de-Valcartier
Municipality
Saint-Henri
Municipality
Saint-Jean-de-l’Île-d’Orléans
Municipality
Saint-Lambert-de-Lauzon
Saint-Laurent-de-l’Île-d’Orléans
Municipality
Saint-Pierre-de-l’Île-d’Orléans
Municipality
Shannon
Municipality
Stoneham-et-Tewkesbury
United Townships (Municipality of)
Wendake
Indian reserve
Montréal
Baie-d’Urfé
Beaconsfield
Beauharnois
Beloeil
Blainville
Boisbriand
Bois-des-Filion
BoucherCity
Brossard
Candiac
Carignan
Chambly
Charlemagne
Châteauguay
Coteau-du-Lac
Côte-Saint-Luc
Delson
Deux-Montagnes
Dollard-des-Ormeaux
Dorval
Gore
Hampstead
Hudson
Kahnawake
Kanesatake
Kirkland
La Prairie
L’Assomption
Laval
Lavaltrie
L’Épiphanie
L’Épiphanie
Léry
Les Cèdres
Les Coteaux
L’Île-Cadieux
L’Île-Dorval
L’Île-Perrot
City
City
City
City
City
City
City
City
City
City
City
City
City
City
Municipality
City
City
City
City
Cité
Township (Municipality of)
City
City
Indian reserve
Indian settlement
City
City
City
City
City
City
City
Municipality
Municipality
City
City
City
Name
Longueuil
Lorraine
Mascouche
McMaster City
Mercier
Mirabel
Montréal
Montréal-Est
Montréal-Ouest
Mont-Royal
Mont-Saint-Hilaire
Notre-Dame-de-l’Île-Perrot
Oka
Otterburn Park
Pincourt
Pointe-Calumet
Pointe-Claire
Pointe-des-Cascades
Repentigny
Richelieu
Rosemère
Saint-Amable
Saint-Basile-le-Grand
Saint-Bruno-de-MontarCity
Saint-Colomban
Saint-Constant
Sainte-Anne-de-Bellevue
Sainte-Anne-des-Plaines
Sainte-Catherine
Sainte-Julie
Sainte-Marthe-sur-le-Lac
Sainte-Thérèse
Saint-Eustache
Saint-Isidore
Saint-Jérôme
Saint-Joseph-du-Lac
Saint-Lambert
Saint-Lazare
Saint-Mathias-sur-Richelieu
Saint-Mathieu
Saint-Mathieu-de-Beloeil
Saint-Philippe
Saint-Placide
Saint-Sulpice
Saint-Zotique
Senneville
Terrasse-Vaudreuil
Terrebonne
Varennes
Vaudreuil-Dorion
Vaudreuil-sur-le-Lac
Verchères
Westmount
Ottawa
Clarence-Rockland
Ottawa
Russell
Toronto
Ajax
Aurora
Bradford West Gwillimbury
Brampton
Caledon
Chippewas of Georgina Island First Nation
East Gwillimbury
Georgina
Type
City
City
City
Municipality
City
City
City
City
City
City
City
City
Municipality
City
City
Municipality
City
Village
City
City
City
Municipality
City
City
City
City
City
City
City
City
City
City
City
Municipality
City
City
Municipality
Municipality
Municipality
Municipality
Municipality
Village
Village
Municipality
City
City
City
Village
Municipality
City
City
City
Township
Town
Town
Town
City
Town
Indian reserve
Town
Town
21
Standard Geographical Classification (SGC) 2006
Name
Halton Hills
King
Markham
Milton
Mississauga
Mono
New Tecumseth
Newmarket
Oakville
Orangeville
Pickering
Richmond Hill
Toronto
Uxbridge
Vaughan
Whitchurch-Stouffville
Calgary
Airdrie
Beiseker
Calgary
Chestermere
Cochrane
Crossfield
Irricana
Rocky View No. 44
Tsuu T’ina Nation 145 (Sarcee 145)
Edmonton
Alexander 134
Beaumont
Betula Beach
Bon Accord
Bruderheim
Calmar
Devon
Edmonton
Fort Saskatchewan
Gibbons
Golden Days
Itaska Beach
Kapasiwin
Lakeview
Leduc
Leduc County
Legal
Morinville
New Sarepta
Parkland County
Point Alison
Redwater
Seba Beach
Spring Lake
Spruce Grove
St. Albert
Stony Plain
Stony Plain 135
Strathcona County
Sturgeon County
Sundance Beach
Thorsby
Wabamun
Wabamun 133A
Wabamun 133B
Warburg
22
Type
Town
Township
Town
Town
City
Town
Town
Town
Town
Town
City
Town
City
Township
City
Town
City
Village
City
Town
Town
Town
Village
Municipal district
Indian reserve
Indian reserve
Town
Summer village
Town
Town
Town
Town
City
City
Town
Summer village
Summer village
Summer village
Summer village
City
County (municipality)
Town
Town
Village
County (municipality)
Summer village
Town
Summer village
Village
City
City
Town
Indian reserve
Specialized municipality
Municipal district
Summer village
Village
Village
Indian reserve
Indian reserve
Village
Name
Type
Vancouver
Anmore
Barnston Island 3
Belcarra
Bowen Island
Burnaby
Burrard Inlet 3
Capilano 5
Coquitlam
Coquitlam 1
Coquitlam 2
Delta
Greater Vancouver A
Katzie 1
Katzie 2
Langley
Langley
Langley 5
Lions Bay
Maple Ridge
Matsqui 4
McMillan Island 6
Mission 1
Musqueam 2
Musqueam 4
New Westminster
North Vancouver
North Vancouver
Pitt Meadows
Port Coquitlam
Port Moody
Richmond
Semiahmoo
Seymour Creek 2
Surrey
Tsawwassen
Vancouver
West Vancouver
White Rock
Whonnock 1
Village
Indian reserve
Village
Island municipality
City
Indian reserve
Indian reserve
City
Indian reserve
Indian reserve
District municipality
Regional district electoral area
Indian reserve
Indian reserve
City
Indian reserve
Village
Indian reserve
Indian reserve
Indian reserve
Indian reserve
Indian reserve
City
City
City
City
City
Indian reserve
Indian reserve
City
Indian reserve
City
City
Indian reserve
Victoria
Becher Bay 1
Capital H (Part 1)
Central Saanich
Cole Bay 3
Colwood
East Saanich 2
Esquimalt
Esquimalt
Highlands
Langford
Metchosin
New Songhees 1A
North Saanich
Oak Bay
Saanich
Sidney
Sooke
South Saanich 1
T’Sou-ke 1 (Sooke 1)
T’Sou-ke 2 (Sooke 2)
Union Bay 4
Victoria
View Royal
Indian reserve
Regional district electoral area
Indian reserve
City
Indian reserve
Indian reserve
City
Indian reserve
Town
Indian reserve
Indian reserve
Indian reserve
Indian reserve
City
Town
255 Smyth Road, Ottawa ON K1H 8M7 Canada
Tel. 613-526-3280 • Fax 613-526-4857 • Inquiries 1-866-711-2262
www.conferenceboard.ca

Metropolitan Condo Outlook Winter 2010

Transcription

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