Buyers from Ontario and British Columbia are snapping-up condos in Alberta, according to new data from Re/Max.
Condo sales are up 65 per cent year-over-year in Calgary, while sales in Edmonton are up nearly 23 per cent over 2021 levels, according to Re/Max’s 2022 Canadian Condominium Report. The report credits buyers from out-of-province investing in the city’s housing stock. Re/Max expects condo sales and prices will remain stable in Alberta, given that the province is expected to lead the country in economic growth this year.
The report, released Thursday, looks at more than 120 communities in six major markets, including Greater Vancouver and Fraser Valley, Calgary, Edmonton, Greater Toronto, Ottawa and Nova Scotia.
Condominium market share continues to grow in major urban centres across the country; the report reflects the realities of the new market and the shifting course of entry-level buyers. The lion’s share of activity is occurring at lower price points. For example, In Toronto, the bulk of sales hovers in the $500,000 to $700,000 range, down from $600,000 to $800,000 earlier this year.
Compared to year-to-date levels one year ago, condos now represent 36 per cent of residential sales in the Greater Toronto Area, 54 per cent of total residential sales in Greater Vancouver, nearly 32 per cent of sales in the Fraser Valley, one in four sales in Edmonton and Ottawa, and almost one in five sales in Calgary. Nova Scotia was the only market to register a decline in market share.
The report provides additional context to the recent decline in sales, noting that 2021 marked a year of record sales in almost all markets. Given that a significant amount of buyer demand has been satisfied, and a portion of buyers are waiting it out on the sidelines due to rapid rate increases, the decline in sales in 2022 was not only expected but the natural course of events, according to Re/Max.
Condominium markets are losing inventory to an attractive rental market as would-be sellers opt to lease their units long-term, according to the research. Many properties that were listed for sale earlier in the year were taken off the market and re-listed as units for lease, given the substantial upswing in rental rates. The price of renting has also escalated in Greater Vancouver and the Fraser Valley, as well as Edmonton and Calgary.
“Rising interest rates have slowly eroded purchasing power…buying a house is more challenging now than ever before,” says Christopher Alexander, President, Re/Max Canada. “For those who have adjusted expectations with every rate hike, the cost of carrying a mortgage versus renting is now more comparable, given sharp double-digit increases in rental rates throughout the major markets, but especially in B.C. and Ontario. So, while fewer sales have occurred in 2022, condominiums represented a greater proportion of overall sales, as buyers gravitated to affordable options to achieve home ownership.”
The report provides additional context to the recent decline in sales, noting that 2021 marked a year of record sales in almost all markets. Given that a significant amount of buyer demand has been satisfied, and a portion of buyers are waiting it out on the sidelines due to rapid rate increases, the decline in sales in 2022 was not only expected but the natural course of events.
The full 2022 Canadian Condominium Report can be found here.
