2021 Housing Impacts to Condo Sector
The Canadian real estate market will see a higher proportion of condominiums in 2021 due to rising single-family home values; Affordability is driving demand for condominiums in full swing in 2021
Astounding increases in single-family home values propelled condominium sales in major Canadian real estate markets in the first eight months of 2021, according to a new report from RE / MAX Canada
The RE / MAX Canada 2021 Condominium Report, Examining trends and developments in five major Canadian real estate markets and more than 100 submarkets, found that buyers turned to condominium in 2021 as condominium values soared out of reach. The strongest sales increases were in the west, where condominium sales in the greater Vancouver and Calgary metropolitan areas rose 87 percent and 83 percent, respectively between January 1 and August 31, 2021, respectively, compared to the same period in 2020 when condominium sales fell significantly. The Greater Toronto Area (GTA) leads the East in terms of percentage increases in condominium sales with 71 percent, followed by Halifax-Dartmouth with 36 percent and Ottawa with 29 percent. The biggest price surge was in the east, with both Halifax-Dartmouth and Ottawa posted double-digit gains of 30.0 and 18.0 percent, respectively. A more moderate appreciation was in. reported Greater Toronto Area (seven percent), Vancouver (6.7 percent) and Calgary (three percent).
“Affordability, coupled with availability, is the foundation for the exceptional rebound in condominium sales in the Canadian real estate markets in 2021,” said Christopher Alexander, senior vice president, RE / MAX Canada. “A double-digit acceleration in values for single-family homes resurrected the collapse in condominium sales earlier in the year, driving demand higher as single-family home supply shrank and prices accelerated. Younger buyers have been behind the pressure on condominiums, with most keen to hedge and buy low interest rates before prices go beyond their means. “
According to the RE / MAX Canada 2021 Condominium Report, the market share of condominiums in the Canadian real estate market has increased in all but one of the regions examined. The greatest concentration of condo sales was reported in the greater Vancouver area, where condos accounted for nearly half (48.2 percent) of total home sales in 2021, up from 46 percent a year ago. This was followed by condominiums and row houses in the GTA with a share of 34.5 percent of the total market after 30.8 percent in the previous year. Almost every fourth property sold in Ottawa between January 1 and August 31, 2021 was a condo, compared to the same period in 2020 (24.3 percent versus 23.3 percent). In Halifax-Dartmouth, the condominium segment accounted for 17.3 percent of total residential take-up, up from 15 percent last year. While total sales in Calgary rose year-over-year, the market share of condominiums declined just under 1 percent to 14.2 percent in 2021.
“Condominium real estate buying activity increased sharply in Calgary in 2021, largely due to its affordable price,” said Elton Ash, executive vice president of RE / MAX Canada. “The supply has fallen from almost eight months to just under five in a year-on-year comparison, although stocks are still 16 percent above the 2020 level. Once excess product is absorbed – and this is happening at a steady pace across the city – condominium values are likely to continue to rise, especially as the average price of single-family homes in the city continues to rise. “