Canada's Condominium Magazine
Measured by rising prices, global property markets are recovering well. Improving economic conditions, including low borrowing costs, are buoying confidence in the real estate sector around the world. Scotiabank’s latest survey of international house prices finds that prices rose in two-thirds of the markets looked at. In last year’s survey, prices had risen in just 40 per cent of markets.
Canada is near the top of the rising house prices chart, posting an 8 per cent year-over-year gain in the final quarter of 2013. Only China, Peru and Colombia had stronger price gains.
The Scotiabank Economics report says that Canada’s housing sector is now moving onto a “more sustainable trajectory,” with lower sales so far this year. Prices, however, continue to rise: the national average house price was up 10 per cent in February, year over year, though the “underlying” trend is more like 5 per cent, the report says.
In Toronto, the now perennial lack of single family homes for sale “appears” to be holding back sales. Toronto is a sellers’ market in the single-family segment. The result is an increasingly wide gap between the cost of a condo and a single-family home. And that combination of low inventory and high prices will be good news for the condo resale market in the year ahead.
“The shortage of single-family homes for sale combined with strained affordability for first-time buyers will buoy resale condominium demand in the year ahead.” The report adds that prices for condos “should be” restrained by the addition of “sizable” new inventory. There are anywhere from 15,000–20,000 new condo units set for completion this year.