Condos a Hot Ticket in Today’s Canada

Posted by Alan Zunec on Tuesday, July 12th, 2011 at 12:57pm.

Across Canada, condominiums have been going up with a vengeance. Most major cities have a forest of cranes dotting their skylines, each one a hint of what will one day stand in their place. Some corners of the real estate market wonder about the warnings from the country’s central bank about inventory overload. Others believe that the change in Canada’s population demographics will help to avoid that.

Currently condo sales are doing well, even better than average. But most analysts believe that the long term health in the market will be because of immigration and the lack of wide open spaces in some of the biggest condo markets. Builders can’t build out, so they will build up. In some places, like Toronto and Vancouver, condos are the only affordable way for many to get into the housing market. In these areas a fixer-upper single-family home might well cost half a million dollars.

Unlike the housing market in the United States, which, along with that country’s economy, is still struggling, Canada only took a brief hit at the beginning of the recession. The Bank of Canada moved quickly, lowering mortgage rates to record low numbers, helping to stabilize the market. That move also helped the economy recover faster.

This past June saw housing starts across Canada increase dramatically. Most were for condos. As of May there were 12,672 units across the nation that were finished yet still empty. That compares to some 4,757 single-family homes in the same situation. Developers are still building, but being smarter about it. A project doesn’t even break ground until at least 70 percent of the units have been sold, complete with secured bank financing.

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