The next 18 months should prove fruitful for condo investors with resale prices set to rise and key markets expected to stabilise. That is according to the latest Conference Board of Canada condo report released by Genworth Canada.
“Although many commentators view the Canadian condominium market as an overvalued bubble about to burst, we think it is only slightly overheated and enjoys sound economic underpinnings," said Robin Wiebe, senior economist at the Centre for Municipal Studies at The Conference Board of Canada. "As such, markets are likely to cool gently. To potential homebuyers, monthly mortgage payments, rather than house prices, are what matter and these should remain moderate."
Resale prices for condos are expected to rise in both 2014 and 2015 in all of the eight cities studied, with Calgary expected to enjoy the biggest growth at 3.3 per cent and Vancouver the slowest at 1.5 per cent.
The Board says that key economic factors – primarily jobs and population growth – look positive for all of the markets researched, with an aging population and rising house prices contributing to the demand for condo units.
The Toronto condo resale market is expected to remain flat in 2014 but will “rise modestly.” Modest economic growth should buoy activity in Vancouver, while the Victoria market will remain “soft” but should see a slight improvement in the next few years, says the report.
Meanwhile, while starts are anticipated to fall again in Quebec and Montreal, the Board says that as more condos get absorbed, this should boost starts in 2015.
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