As realtors, there are few better than folks like yourself when it comes to having a clear understanding of the big picture of housing trends in your city and across the country as a whole. Certain trends will need your expertise and industry wherewithal, but others will be clear to even the most layman of people. One of those certainly is the fact that the days of hoping for detached home ownership are over for the majority of people living in overpopulated urban centres.
That has meant that condominiums are increasingly the focus of prospective homebuyers, and many realtors are putting the bulk of their energies into focusing on them when connecting buyers to sellers, and vice versa.
Here at Real Estate Leads, our online real estate lead generation system has been a big help for realtors who find they’re struggling to prospect on their own via traditional means. It allows you to get more out of your efforts, and we’ve enjoyed seeing how so many have benefitted from it.
So getting back on the topic here – condominiums were officially the strongest-performing housing type in 2017, and they outpaced single-family homes in terms of price growth all across the year according to Royal LePage’s house price survey.
This survey found that strong overall year-over-year housing market growth – the national average home price rose 10.8% to $626,042, – coincided with condos increasing a much larger 14.3% to an average price of $420,823. This is especially significant when you consider that 1-storey and 2-storey houses rose just 7.1% to $522,963 and 11.1% to $741,924 respectively.
Not only are condos increasingly in demand for homeowners, but they’re also increasingly a better investment for investment buyers.
Toronto and Vancouver at Forefront for Condo Growth
This one probably comes as no suprise. Most of the price growth in the condo sector was fuelled by activity in Canada’s largest markets. Toronto saw prices rise 19.5% to $476,42, while Vancouver moved up 18.77% to $775,806. The consensus seems to be that condominiums are the last bastion of affordability for prospective homebuyers, and especially so for first-time buyers whose purchasing power has been reduced by tightened mortgage regulations.
So it’s quite natural that realtors who have an eye on the future will be focusing more on condominiums entering the market than previously. Are you following suit?
Consider further that condos were the only housing type to appreciate on a quarterly basis, rising 1.1%, while single-family homes moved nowhere in price growth.
That’s the exact opposite of the way it was for decades previously, with condo prices typically having risen more slowly compared to the always-more-expensive detached homes.
This is because condos have appreciated at a slower pace than detached homes, and primarily because supply constraints have been easier to address, with new building development being much more cost-effective and city-zoning friendly in comparison. But now we’re seeing demand for condos being so high that the trend has been reversed.
We will likely see builders bringing in new planned product to the market to help alleviate supply and moderate prices, but we can be sure that Canada is now primarily a nation of condo dwellers much like most other advanced economies around the globe.
Expect Condo Sales to Surge in Back Half of 2018
The bulk of the condo sales growth seen in 2017 occurred in the first part of the year, before measures like the Ontario Fair Housing Plan were implemented. Activity slowed significantly in the fourth quarter, and especially for detached homes. The consensus seems to be that we will see a slower start to the 2018 market as new OSFI mortgage rules become entrenched in buyer spheres, and we’ll also see typical supply and demand factors making for a more robust second half of the year.
It’s predicted that home prices will rise 4.9% nationally by end of 2018, with 6.8% in the GTA, and 5.2% in Greater Vancouver. Montreal is expected to see 5.5%
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