A comparison of prices for condos and single-family homes over the past 20 years reveals the former have kept pace with the latter, that despite growing fears about the soundness of condominium investment, according to a new report released Royal LePage.
More specifically, in the GTA, condo prices have risen 5.1 per cent per year on average, versus the 5.9 per cent average increase logged for the single-family home. Montreal saw condo prices rise by 5.5 per cent per year, compared to 5.1 per cent for the average single family home.
The gap between Vancouver's condos and its houses is only slightly larger, with the average price of those apartments climbing 4.5 per cent per year, versus the 5.7 per cent for single-family homes.
"While some divergence may be expected in the near-term," writes the report's author, economist Will Dunning, the suggestion is "condominiums will experience growth rates similar to single family homes over the long-term."
That acts as a counterweight to real worries about an oversupply of condos, especially in Canada's large urban market. The report may also allay concerns that condo investors will pull out of the market in 2014 to avoid the kind of crash some economists were anticipating but has yet to occur.
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