Demand is expected to heat up in 2025
Condo listings in Canada are on the rise, with increased demand expected to arise by late 2024 and early 2025, according to RE/MAX Canada’s latest condominium report.
The Fraser Valley saw the highest listing growth (58.7%), followed by Greater Toronto (52.8%) and Calgary (52.4%). Meanwhile, inventory growth was modest in Edmonton, Halifax, and Vancouver. Despite these figures, values held steady or even increased in most markets, with Calgary seeing a 15% price gain, while Greater Toronto experienced a slight 2% decline.
Sales in Alberta were strong because of in-migration, while Edmonton showed a 37% increase in condo sales, marking its best performance in five years. Calgary also saw a sales increase of 2.6%. However, other markets showed softer homebuying activity. "High interest rates and stringent lending policies pummelled first-time buyers in recent years," said RE/MAX Canada president Christopher Alexander. He predicts pent-up demand will drive stronger market activity by spring 2025, especially at entry-level price points, as buyers and investors seek affordable condos.
Edmonton and Calgary remain seller's markets, while conditions in Greater Vancouver, Fraser Valley, Ottawa, and Halifax are more balanced. Toronto could potentially see a quick turnaround, with Alexander noting that absorption rates are a key indicator, and some Toronto neighborhoods have already experienced a price bottom, suggesting a market recovery could be imminent.
The report also highlights how investor activity is slowing down in different areas, specifically in the Greater Toronto area, where increasing mortgage costs have resulted in negative cash flow for about 30% of investors. On the other hand, Edmonton remains a hotspot for investor interest, with lower costs attracting out-of-province buyers. Alexander said that "end users are in the driver’s seat right now," presenting a rare opportunity for aspiring condo buyers to find less competition from investors, especially in markets like Toronto and Vancouver.
Immigration and interprovincial migration will continue to drive condo demand. The report highlighted that condos are becoming increasingly vital as a middle step in the nation's hottest market.
