TORONTO — Condo inventory is on the rise in most major Canadian markets as more sellers are listing their properties in anticipation of growing demand from buyers, a new report says.
The report by Re/Max Canada, which examined condominium activity from January to August of this year, found B.C.’s Fraser Valley led year-over-year inventory growth at 58.7 per cent, followed by the Greater Toronto Area at 52.8 per cent and Calgary at 52.4 per cent.
Those regions were followed by Ottawa, with 44.5 per cent inventory growth from the same period last year, Edmonton at 17.7 per cent, Halifax at 8.1 per cent and Vancouver at 7.3 per cent.
The real estate firm attributed the influx of supply to sellers’ expectations that demand will pick up in the fourth quarter of this year and early 2025.
“High interest rates and stringent lending policies pummelled first-time buyers in recent years, preventing many from reaching their home-ownership goal, despite having to pay record high rental costs that mirrored mortgage payments,” said Re/Max Canada president Christopher Alexander in a news release.
“The current lull is the calm before the storm. Come spring of 2025, pent-up demand is expected to fuel stronger market activity, particularly at entry-level price points, as both first-time buyers and investors once again vie for affordable condominium product.”
The GTA was the only region where average condo prices declined year-over-year, with a 1.9 per cent drop to $732,648 for the period examined.
Calgary led the way for average price growth, posting a 15 per cent gain to reach $347,203. Meanwhile, the Greater Vancouver Region was the most expensive market for condos with an average price of $823,550, up 1.9 per cent from the 2023.
Edmonton was the cheapest, with an average price of $200,951, however that was the second biggest gain of any market, up four per cent year-over-year.
For the first eight months of the year, Edmonton posted a 36.7 per cent increase in sales compared with the same period in 2023, even as most regions saw sales decline from last year.
The GTA, Greater Vancouver and Fraser Valley each recorded sales declines of more than eight per cent.
“The current uptick in inventory levels is drawing more traffic to listings, yet buyers remain somewhat skittish across the country,” the report said.
“The first two Bank of Canada interest rate cuts did little to entice prospective homebuyers to engage in the market, given the degree of rate increases that took place. However, with further rate reductions expected and policy adjustments to address affordability and ease entry into the market, activity will likely start to climb, particularly among end users.”
The report warned that Toronto, where oversupply and lagging demand have plagued the condo market, may be the last market to emerge from sluggish conditions.
It said inventory levels have continued to climb as available resale units were joined by an influx of new completions, noting 20,000 new condo units are planned for the GTA in 2025, followed by 30,000 in 2026 and 40,000 in 2027.
“With a six-month supply of condominiums currently available for sale, the GTA market is heading into clear buyers’ territory,” the report said.
“With values at or near bottom and Bank of Canada overnight rates trending lower, the fall market may represent the perfect storm for first-time buyers … As absorption rates increase, the current oversupply will be diminished and demand will take flight, placing upward pressure on average prices once again.”
This report by The Canadian Press was first published Oct. 9, 2024.
Sammy Hudes, The Canadian Press