Waterloo Region Record

Condominiums accounted for more than one-third of all Canadian housing starts last year, and more than half of the total in several of the country’s biggest cities, the Canada Mortgage and Housing Corp. says.

The federal agency says condominium apartment starts represented less than one in five Canadian housing starts in the early 1990s, but that proportion had grown to more than one in three in 2013.

Comment: Of course, more people want them. From downtown-vs-suburbs to price issues, there are simply more condos than there were 20-25 years ago. We need to stop acting surprised every time that comes up.

Vancouver, the country’s most expensive real estate market, saw condos make up 62.6% of its housing starts last year. In Montreal, condos accounted for 56.3% of the starts and in Toronto they accounted for 53.9% of new housing construction, the corporation said in an annual market review released Thursday.

Comment: Toronto is the 3rd highest? Yet another argument against overbuilding.

“This long-term trend toward a higher share of condominium starts, especially in higher-priced urban centres, is likely due to the relatively lower price of condominium apartment units compared to freehold single-detached dwellings,” it said in the 2014 Canadian Housing Observer.

“In addition, in most large urban centres, the secondary rental condominium market has become an increasingly important complement to purpose-built rental housing.”

Comment: And fewer people see the suburbs as the ideal location.

The corporation said the share of purpose-built rental starts was about 20% of total starts in the early 1990s, but fell to 14% in 2013.

Vancouver saw rental starts make up 16.8% of total, while 15% of the starts in Montreal last year were purpose-built rental properties. However in Toronto, just 2.1% of the housing starts were purpose-built rental starts.

Comment: Which adds to the demand for rental condos. Fueling investment condo purchases. Further fueling the condo boom in general.

The report also noted that after taking into account differences due to exchange rates, inflation and other factors that affect the purchasing power of home buyers, Canadian home prices remain higher than those in the United States.

Comment: Just like books and cars. But this is different. People want to live here, our real estate is more in demand. Outside of a few select cities, such as New York and Los Angeles, most of the US is low-demand and cheap.

“This Canadian ‘premium’ could be a cause for concern, because it may indicate that house prices in Canada are overvalued,” the report said.

“CMHC is analyzing these differences, in order to understand the reasons for the price differential, be they structural, temporary or reflective of relative overvaluation in Canada.”

Comment: We are more stable, more desirable, and thus more expensive. Toronto is simply in higher demand than Little Rock.

The strength of the Canadian housing market and concerns about a possible housing crash have garnered much attention.

Comment: And are now being put to rest by most respectable institutes and organizations. Most of us agree now that there is not going to be any crash, that the housing market is stable and safe.

Last month, the Bank of Canada raised concerns about the “renewed vigour” it detected in the housing market and consumer spending since the summer.

However, both Bank of Canada governor Stephen Poloz and Finance Minister Joe Oliver have downplayed the susceptibility of the Canadian housing market.

Comment: And the CMHC, plus many of the big banks.

Oliver and most analysts have predicted a soft landing for the real-estate market.

Comment: If and when it ever does land.

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

Laurin Jeffrey is a Toronto real estate agent with Century 21 Regal Realty.
He did not write these articles, he just reproduces them here for people who
are interested in Toronto real estate. He does not work for any builders.
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