Toronto, Ottawa Condo Markets Remain Strong Yet Accessible Opportunities for First-Time Homebuyers

Condos will continue to offer solid opportunities for first-time homebuyers trying to enter the market and looking for accessible, affordable housing, according to new data released today by Genworth Financial Canada, a subsidiary of Genworth Financial, Inc.

Genworth’s Winter 2008 Metropolitan Condominium Outlook reports that local condo resale prices in Ontario’s two largest cities, Toronto and Ottawa, will post average annual increases of 3.2% and 3% respectively from 2008 to 2012.

Toronto’s average condo price will rise from $236,351 in 2008 to $268,488 by 2012, while Ottawa’s condo prices are expected to climb from $188,276 in 2008 to $215,231 by 2012.

In Toronto, the average price of a condo jumped 7.6% in 2007, but price appreciation is forecast to slow to 2.9% this year before rising more rapidly toward the end of the decade, providing a strong opportunity for first-time buyers this year.

“Condominiums continue to fill the demand for relatively affordable housing that is accessible to first-time buyers, particularly in Toronto,” said Peter Vukanovich, president of Genworth Financial Canada. “With prices of detached homes forecast to exceed $459,000 on average throughout the province – and in most Toronto neighbourhoods well above $500,000 – condos remain attractive options and provide a good homeownership entry point in Ontario’s two largest cities.”

Cranes will dot the skies over Toronto this year. Condo starts are forecast to increase by 28.3% to 11,883 units, leading the country and overtaking 2007 leader Vancouver, where 8,688 units are projected for 2008.

The Toronto surge follows a decline in starts of more than 30% last year to 9,261 units. That ‘see-saw’ market effect will even out through 2012, with condo starts in the city forecast to increase by 8.8% annually over the next four years, peaking at more than 16,600 units in 2012.

Ottawa condo starts will remain virtually flat this year at a projected 1,057 units, and are forecast to remain at about 1,000 starts per year through 2012.

The Genworth report, produced with the Conference Board of Canada, concludes that “recently elevated volumes suggest condos are becoming entrenched in most communities,” and that certainly is the case in Toronto and Ottawa.

“The Toronto and Ottawa condo markets remain a good opportunity for first-time buyers. The slower rate of price appreciation in 2008 will benefit first-time buyers looking to get into the market, and the availability of innovative mortgage solutions makes that first-time purchase more accessible and affordable than ever,” said Vukanovich.

“This report underscores the solid value condominiums in Toronto and Ottawa offer to first-time buyers looking to get a foothold in Canada’s robust housing market. A condo offers an affordable opportunity to begin to build equity in a home of your own,” said Jim Murphy, President and CEO of the Canadian Association of Accredited Mortgage Professionals (CAAMP).

The Winter 2008 Metropolitan Condominium Outlook reviewed resale condo markets in Quebec City, Montreal, Ottawa, Toronto, Calgary, Edmonton, Vancouver and Victoria. All eight markets registered moderate price growth in 2007 and are forecast to continue to have moderate growth this year and through 2012.

About Genworth Financial Canada:
Genworth Financial Canada, The Homeownership Company, works with lenders, mortgage brokers, real estate agents and builders to make homeownership more affordable and accessible throughout Canada. The company combines global experience in mortgage insurance with technological and service leadership to deliver innovation to the mortgage marketplace.

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Contact Laurin Jeffrey for more information – 416-388-1960