THIS PAST YEAR SAW THE SINGLE-FAMILY DETACHED HOME AND CONDO MARKETS DIVERGE ON DISTINCTLY DIFFERENT PATHS IN CANADA’S TWO HIGHEST-PRICED REAL ESTATE MARKETS, GREATER VANCOUVER AND THE GREATER TORONTO AREA, AS REVEALED IN THE 2018 HOUSING MARKET OUTLOOK.

The trend is expected to continue into 2018 as a mix of relative affordability for condo units and price appreciation for detached homes in recent years, combined with government policy changes in both markets, has helped push an influx of buyers toward condo ownership.

In Greater Vancouver, demand for condos continues to outpace supply, resulting in the average price of a condo rising an estimated 16 percent year-over-year, from $553,604 in 2016 to $643,778 in 2017. The GTA’s condo market also saw price appreciation of 22 percent in 2017, as the average sale price for a condo rose to an estimated $523,437, up from $429,241 in 2016. As condo prices rose, sales for single-family detached homes declined 25 per cent in Greater Vancouver and 22 per cent in the GTA year-over-year between January and the end of October 2017.

The RE/MAX 2018 average residential sale price expectation for Canada is an increase of 2.5 per cent as the desire for home ownership remains strong, particularly among Canadian millennials.

Victoria

A strong local economy has contributed to high demand in Victoria and, combined with limited inventory, has led to price appreciation in the real estate market. Condos were in high demand in the city in 2017 but municipal regulations introduced at the end of September restricting short-term rentals may lead to decreased activity moving forward, particularly amongst investors and developers. The new OSFI mortgage qualification rules that come into effect in 2018 are predicted to slow price appreciation and increase inventory levels across the market early in the year as buyers adjust to the changes; however, the market is expected to stabilize in the second half of the year.