Canadian Real Estate 2021 Condominium Impact
Canadian condo sales saw a significant rebound in the first eight months of 2021, according to the RE/MAX Canada Canadian Real Estate 2021 Condominium Impact. Driven largely by price increases in detached single-family home across the nation, condominium sales surged.
The report was released in October 2021 and as we shoot this in mid-November, the trends remain consistent.
Buyers and Prices
Condo sales, like detached single home sales, were driven mostly by young families. In the case of condos, low interest rates and more affordable price points encouraged buyers to enter this market before prices rise.
In some areas of the country condo sales reported massive increases over a slow 2020. Vancouver had an 87.2% increase and Calgary an 82.6% increase in sales. Notably, those cities also saw a modest price increase of 6.7% and 3% respectively. Toronto had a 71% increase in sales and a 7.5% increase in price.
The Halifax-Dartmouth market showed a sales increase of 35.9% and a price increase of 29.8%
In Ottawa, a more modest sales increase of 28.9% accompanied a price increase of 17.5%. However, the condo sector of the Ottawa real estate market remained brisk and solid, with an uptick from 2020 as detached housing prices soared.
Young buyers took advantage of the larger supply of condos compared to detached houses as well as lower price points. From January through August 2021, more than 3,500 condos and townhomes were sold in the area.
Older buyers living in Ottawa and ready to downsize also took advantage of the condo market. They, too, were feeling the squeeze of high prices and low availability of detached homes. Lower prices and more stock saw them turn to condos as a downsizing alternative.
Empty nesters and retirees who sold their detached homes increasingly chose condos in walkable neighborhoods for downsizing.
Ottawa condo sales were strongest in the Centretown area. Despite seeing about 11% of all Ottawa condo sales, prices in the area rose only 2%.
Other areas of high condominium demand included those near the University of Ottawa and Carleton University. These areas are marked by sales to investors looking for opportunities now that students are back to in-person classes.
The Lowertown Market and Sandy Hill areas joined Centretown to round out the top three areas for condo sales in Ottawa. As sales increase, so does price, though not nearly at the rate of detached housing.
Other Ottawa real estate areas seeing condo sales growth include the Glebe, Westboro, and Old Ottawa East. The latter is increasingly popular for those downsizing from larger homes.
Supply and Demand
As demand increases for condos and townhouses, supply decreases. The Ottawa real estate market currently reports 24.3% of its sales in condos, up over 1% from 2020.
Other regions of the country saw even larger growth. Vancouver has 48.2% of its housing sales in condominiums, an increase of 2.2%. The Greater Toronto Area is at 34.5%, a 3.7% increase year-over-year.
Halifax-Dartmouth had a 2.3% increase in condo sales, moving up to 17.3% of its market. Calgary, even with its 82.6% sales increase, saw a slight decrease in market share, at 14.2% down from 15.1%.
Ottawa real estate agents are seeing that condo demand is set to outpace supply, though not immediately. Inventory has been slow to increase, with more rental units and few luxury options.
Even with the surge in demand, the inventory of condos remains greater than that of detached homes. Supply and the lower price point indicate that realtors will continue to see more people moving to Ottawa choosing to enter the condo market into 2022.
The Bottom Line of Canadian Real Estate 2021 Condominium Impact
Ottawa realtors will continue to see strong and stable condo sales into 2022. Driven by young people and investors near the universities, these properties have lower starting prices and more availability.
As the surging market for detached homes has seen more young families and retired homeowners unable to find suitable houses, condos have gained popularity. This revived market is likely to continue as demand outpaces supply for detached homes.
Condominiums and townhomes are making up increasing percentages of the real estate market in Ottawa and across Canada. In Vancouver, almost half of the market is now condos.
The pressure that increased demand is putting on condo supply is reflected in increasing prices, though not nearly at the pace of detached homes.
Condos and townhomes are likely to remain solid and stable housing options for young people entering the housing market. They are also likely to continue serving the needs of the growing number of retirees and empty-nesters looking for smaller living spaces.
As interest rates are expected to be stable, the increased demand for condos and townhomes should continue into 2022. This revitalized market is an ideal alternative to scarce detached houses with price tags too high for first-time homebuyers.