Metropolitan Condo Outlook: Summer 2012€¦ · private residential mortgage insurer since 1995. Known as “The Homeownership Company,” it provides default mort- gage insurance

Metropolitan Condo Outlook Summer 2012

Insights Into the Apartment Condominium Market in Eight

Large Canadian Metropolitan Areas

Economic PErformancE and TrEnds

About Genworth Financial CanadaGenworth Financial Canada, a subsidiary of Genworth MI Canada Inc. (TSX:MIC), has been the leading Canadian private residential mortgage insurer since 1995. Known as “The Homeownership Company,” it provides default mort-gage insurance to Canadian residential mortgage lenders that enables low-down-payment borrowers to own a home more affordably and stay in their homes during difficult financial times. Genworth Financial Canada combines technological and service excellence with risk management expertise to deliver innovation to the mortgage marketplace. As of June 30, 2012, Genworth Canada had $5.5 billion total assets and $2.8 billion shareholders’ equity. Based in Oakville, Ontario, Genworth Canada employs approxi-mately 260 people across Canada.

Additional information about Genworth Financial Canada is available at www.genworth.ca.

PrefaceThis report from The Conference Board of Canada and Genworth Financial Canada offers an in-depth analysis of the condominium market for eight large Canadian census metropolitan areas (CMAs). The report covers a wide range of condominium market statistics, such as starts, completions, absorptions, and prices. The main goal of this publication is to analyze the recent trends in the condo market in each of the eight CMAs, as well as where each of the eight markets is heading over the next five years.

The eight census metropolitan areas covered are Québec City, Montréal, Ottawa, Toronto, Calgary, Edmonton, Vancouver, and Victoria.

This report is published twice a year, in summer and winter.

Metropolitain Condo Outlook: Insights Into the Apartment Condominium Market in Eight Large Canadian Metropolitan Areasby Jane McIntyre and Robin Wiebe

About The Conference Board of CanadaWe are:

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research organization in Canada.

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� Specialists in economic trends, as well

as organizational performance and public

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� Not a government department or agency,

although we are often hired to provide

services for all levels of government.

� Independent from, but affiliated with, The

Conference Board, Inc. of New York, which

serves nearly 2,000 companies in 60 nations

and has offices in Brussels and Hong Kong.

Publication 13-055 ©2012 The Conference Board of Canada*Published in Canada • All rights reservedAgreement No. 40063028*Incorporated as AERIC Inc.

Forecasts and research often involve numerous assumptions and data sources, and are subject to inherent risks and uncertainties. This information is not intended as specific investment, accounting, legal, or tax advice.

conTEnTs

overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

metropolitan insights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3Québec City . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Montréal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Ottawa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Toronto . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Calgary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Edmonton. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Vancouver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Victoria. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

definitions and concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27

standard Geographical classification (sGc) 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28

The Conference Board of Canada/Genworth Financial Canada

Canadian housing and condominium markets are

stalked by twin fears that low interest rates are

prompting Canadian homebuyers to engage in a

debt-fuelled shopping spree and bidding up house prices

unsustainably. Policy-makers fear that the inevitable

interest rate hikes over the medium term could make

these debts unmanageable. Meanwhile, a significant

correction in house prices might devastate household

finances and induce recession. Markets in Toronto and

Vancouver are said to pose particular risks.

Canada’s central bank and its Department of Finance face

a dilemma. Boosting interest rates, a common remedy

for an overheated economy, risks increasing the value

of the Canadian dollar, thus posing additional problems

for the beleaguered manufacturing sector in Central

Canada. Instead, policy-makers have repeatedly warned

against over-indebtedness and have tightened mortgage

rules on four occasions. The latest squeeze, in mid-June

this year, reduced the maximum mortgage amortization

period to 25 years, limited equity takeout to 80 per cent of

a house’s value, disallowed taxpayer-insured mortgages

on homes costing over $1 million, and trimmed the max-

imum allowable ratio of debt-servicing costs to income.

Meantime, continued deterioration abroad presents a

major risk. The U.S. economy remains lacklustre, finan-

cial crisis grips Europe, and Chinese economic growth is

slowing. Canadian housing markets thus appear destined

to correct, but we think the correction will remain rela-

tively mild, thanks to decent employment growth and

continued low interest rates. But regional cracks will

ovErviEW

Apartment Condo Indicators

starts resale sales resale price ($)*

2011 2012f 2013f 2011 2012f 2013f 2011 2012f 2013f

Québec city 2,034 1,365 1,041 1,792 1,925 1,983 205,660 214,756 219,235 21.4 –32.9 –23.7 –0.4 7.4 3.0 3.8 4.4 2.1

montréal 12,329 8,479 7,154 12,762 13,333 13,785 256,824 265,594 272,001 19.8 –31.2 –15.6 0.9 4.5 3.4 3.7 3.4 2.4

ottawa 1,327 1,349 1,213 1,741 1,746 1,799 261,442 278,489 283,606 –12.0 1.6 –10.1 –5.1 0.3 3.0 1.4 6.5 1.8

Toronto 19,153 18,724 15,689 22,906 22,636 22,786 300,946 304,755 312,352 65.3 –2.2 –16.2 5.6 –1.2 0.7 7.4 1.3 2.5

calgary 2,055 2,373 2,097 3,425 3,555 3,621 237,354 239,445 246,414 93.3 15.5 –11.7 5.2 3.8 1.9 –2.3 0.9 2.9

Edmonton 1,369 1,133 1,598 2,583 2,336 2,423 212,678 208,649 215,290 –6.4 –17.2 41.0 4.5 –9.6 3.7 –2.2 –1.9 3.2

vancouver 7,136 6,556 6,940 12,836 12,035 12,410 373,077 355,406 348,152 23.2 –8.1 5.8 –1.9 –6.2 3.1 2.5 –4.7 –2.0

victoria 491 506 541 1,648 1,622 1,705 287,237 277,752 284,710–38.6 3.0 6.8 –9.6 –1.6 5.1 –1.2 –3.3 2.5

*Average resale prices are used for Québec City and Montréal; median resale prices are used for the rest of the metropolitan areas. Resale and average prices in Montréal and Québec City include all condominium styles, not just apartments.f = forecastItalics indicate percentage change.Sources: The Conference Board of Canada; CMHC Housing Time Series Database; Canadian Real Estate Association; Quebec Federation of Real Estate Boards.

2 | Metropolitan Condo Outlook—Summer 2012


appear. Calgary, Ottawa, and Québec City look set to fare

best. Conditions are weak in both major British Columbia

markets. In Vancouver, slowing Chinese demand probably

represents a larger threat to housing prices than poor

affordability. In Toronto, the condominium market is

slowing, but this will be gradual, not disorderly.

Over the next few years, a growing population in all

eight of our areas will provide vital demographic support.

Forecast advances for 2012 range from 0.5 per cent in

Victoria to 2.5 per cent in Calgary. And, while rising

prices for single-detached homes are increasingly driving

first-time buyers toward condominiums, retirees aged

55 or more also remain heavy condominium consumers.

This cohort increased its share of the total population at

least four percentage points in the decade ending 2011

in all of our eight cities, led by a six percentage point

gain in Québec City. Unsurprisingly, Victoria has the

oldest population, with roughly a third of its population

now aged at least 55.

Economic conditions remain decent. Gross domestic

product is expected to advance in all eight cities for the

third straight year in 2012. A 3.5 per cent GDP advance

in Calgary will set the pace, followed closely by 3.2 per

cent in Edmonton. But GDP will rise only 1.6 per cent

in both Victoria and Ottawa. Employment expectations

vary. Calgary also leads here, with 3.1 per cent job growth

predicted for 2012, while Montréal’s labour market will

be flat. A forecast drop in the five-year mortgage rate to

5.2 per cent in 2012 from 5.4 per cent in 2011 is also

positive for condominium markets.

Condominium sales were mixed in 2011. Volumes fell

10 per cent in Victoria and by lesser percentages in

Québec City, Ottawa, and Vancouver. But sales rose

roughly 5 per cent in each of Toronto, Calgary, and

Edmonton. For 2012, Calgary sales will keep rising,

but Toronto and Vancouver are expected to see sales drop

1 per cent and 6 per cent respectively, while Edmonton’s

will decline by 10 per cent. This year’s forecast leader

will be Québec City, with a 7 per cent rise.

Active listings in 2012 are forecast to increase 38 per

cent in Calgary, while Montréal, Québec City, Toronto,

and Vancouver will also see hikes. Such supply increases

are forecast to trim the sales-to-active-listings ratio in

all of these cities. The ratio will also drop in Edmonton,

despite easing listings. Declining supply in Victoria and

Ottawa will fuel the only two increases in the sales-to-

active-listings ratio expected this year. Buyers’ markets

are forecast everywhere this year except Calgary and

Toronto, which should be balanced. Buyers’ conditions

will foster only weak price growth in 2012, although

the median price in Ottawa is expected to jump 6.5 per

cent. The median condominium price in Toronto is

forecast to rise 1.3 per cent, its slowest growth since

1996. But the median price is forecast to drop 5 per

cent in Vancouver. It will post declines in Victoria and

Edmonton as well, although the decline will not be as

pronounced as in Vancouver.

On the new construction side, absorption of new condo-

minium apartments is forecast to fall only in Edmonton in

2012, although only tiny increases are expected in Québec

City and Ottawa. Calgary absorptions are expected to more

than double, but remain well below their boom-era level

of before the recession. Rising new unit take-up is pre-

dicted in both Vancouver and Toronto. Despite higher

absorptions in Toronto, its volume of completed and

unoccupied units is expected to increase 25 per cent this

year. But these inventories remain well below those of

the early 1990s and are expected to ease in 2013. In

Vancouver, unsold stocks are predicted to rise only 6 per

cent and also remain below the problematic mid-1990s

levels. Inventories in Montréal are projected to rise sig-

nificantly for a second straight year. Given the higher

stocks, apartment condominium starts are forecast to

fall in five markets. By contrast, Calgary is expected

to see starts increase 16 per cent, but to nowhere near

boom-era levels.

Easing prices in Vancouver are forecast to cut mortgage

carrying charges by 6.5 per cent in 2012, the largest drop

among our eight cities. Toronto, Calgary, Edmonton, and

Victoria are also expected to see declines. Vancouver

remains our least affordable market both in absolute

and relative terms (when analyzed as a share of local

incomes). Absolute carrying charges are the lowest in

Edmonton and Québec City. Calgary is our most afford-

able city when analyzed relative to local incomes.

Summer 2012—Metropolitan Condo Outlook | 3


mETroPoliTan insiGhTs

A healthy first quarter will help boost unit sales in Québec City’s resale apartment condominium market in 2012. However, the new home market

is expected to take a break, as starts of condominium units have been brisk recently, and developers remain occupied with the large number of units under construction.

Sales in Québec City’s resale apartment condominium

market recovered quickly from their short-lived downturn

in 2008. But listings stayed low, keeping the sales-to-

active-listings ratio high, at over 18 per cent, and helping

to keep price growth strong, at an average of 7.5 per

cent per year over 2008 and 2009. Although unit sales

then dipped 0.8 per cent in 2010 and another 0.4 per

cent in 2011, partly because higher taxes kept buyers

at bay, the level of activity remained healthy, at around

1,800 units sold. But sellers were finally returning to

the market. Active listings rose 3.2 per cent in 2010

and a whopping 45.6 per cent in 2011. Accordingly,

the sales-to-active-listings ratio dropped to 12.4 per cent

last year—its lowest level since 2000. In turn, growth in

apartment prices slowed from 9.6 per cent in 2010 to

3.8 per cent in 2011, the smallest gain in five years.

More modest price increases helped to spur renewed

growth in unit sales of apartment condominiums through

the last quarter of 2011 and the first quarter of this year.

Overall, unit sales are expected to rise by 7.4 per cent

in 2012, topping 1,900 units for the first time. Active

listings are forecast to increase as well, also thanks to

continued strong growth through the first quarter. This

will push the sales-to-active-listings ratio below 12 per

cent, thus keeping the gain in average apartment prices

to a modest 4.4 per cent this year. Over 2013 and 2014,

the market will be driven by stable population and eco-

nomic growth. However, by 2015, rising interest rates will

begin to slow demand once more. At the same time, sell-

ers, discouraged by the more moderate price growth in

recent years, are expected to reduce active listings.

QuéBEc ciTy

Share of Population by Age Cohort(per cent)

f = forecastSources: The Conference Board of Canada; Statistics Canada.

1992 2004 2016f0

5

10

15

20

25

30

15–24 25–39 40–54 55–74 75+

Apartment Condo Construction(starts, units; share, per cent)

f = forecastSources: The Conference Board of Canada; CMHC Housing Time Series Database.

1997 99 01 03 05 07 09 11 13f 15f

0

500

1,000

1,500

2,000

2,500

0

10

20

30

40

50

Apartment condo starts (left)Condo starts as a share of multiple starts (right)



While this will result in some upward movement in the

sales-to-active-listings ratio, the increase will not be

enough to cause big price gains. From 2013 to 2016,

average apartment prices are expected to rise by just

3.5 per cent annually.

Unlike the resale market, demand in Québec City’s new

apartment condominium market increased through the

global recession, as absorptions rose by more than 26 per

cent over 2008–09. Builders responded by boosting starts

52.4 per cent in 2008 and 16.8 per cent in 2009, up to

1,300 units. In general, demand in the new apartment

condominium market has been healthy for a number of

years partly thanks to increasing population growth, as

well as a rapidly increasing share of the population

aged 55 and older—a prime buying group for apartment

condominiums. And so, combined with spillover demand

from the resale market, builders continued to increase

starts at a rapid pace in 2010 and 2011 as well. By last

year, starts of apartment condominiums had reached a

record 2,000 units—more than double their previous

10-year average.

Affordability and Condo Sales(share, per cent; sales, units)

f = forecastSources: The Conference Board of Canada; Quebec Federation of Real Estate Boards.

1998 00 02 04 06 08 10 12f 14f 16f0

4

8

12

16

20

0

500

1,000

1,500

2,000

2,500

Share of household income spent on mortgage (left)Existing apartment condo sales (right)

Sales to Active Listings and Price Change(per cent)


1997 99 01 03 05 07 09 11 13f 15f−5

05

1015202530

−10−50510152025

Sales-to-active-listings ratio (left)Average price growth (right)

Ratio of Condominium Starts to Population Growth(starts per one person increase in population)


1997 99 01 03 05 07 09 11 13f 15f

00.050.100.150.200.250.300.35

Current year 20-year average

Employment Growth(per cent)


1997 99 01 03 05 07 09 11 13f 15f

−2

0

2

4

6

8



In the first quarter of 2012, units under construction

climbed to unsustainable record levels, and so builders

are expected to pull back from the market through the

rest of 2012 and into 2013. Starts of apartment condo-

miniums are forecast to drop by almost 50 per cent over

this year and next, back down to 1,040 units. Absorptions

are also expected to weaken. Through 2014 to 2016,

starts will remain under 1,100 units, nearer their long-

term average.

Resale Condominium Apartment Market

2009 2010 2011 2012f 2013f 2014f 2015f 2016f

unit sales 1,815 1,800 1,792 1,925 1,983 2,040 2,070 2,0812.0 –0.8 –0.4 7.4 3.0 2.9 1.5 0.5

active listings 796 822 1,197 1,363 1,205 1,154 1,130 1,123–0.9 3.2 45.6 13.9 –11.6 –4.3 –2.1 –0.6

months’ supply 5.3 5.5 8.0 8.5 7.3 6.8 6.5 6.5

average price 180,802 198,203 205,660 214,756 219,235 226,182 235,263 246,2756.6 9.6 3.8 4.4 2.1 3.2 4.0 4.7

f = forecastItalics indicate percentage change.Sources: The Conference Board of Canada; Quebec Federation of Real Estate Boards; CMHC Housing Time Series Database.

New Condominium Apartment Market

2009 2010 2011 2012f 2013f 2014f 2015f 2016f

starts 1,298 1,675 2,034 1,365 1,041 1,037 1,052 1,07316.8 29.0 21.4 –32.9 –23.7 –0.4 1.5 2.0

under construction 674 919 1,473 1,621 1,403 1,396 1,418 1,453–0.3 36.3 60.2 10.1 –13.5 –0.5 1.6 2.4

completions 1,203 1,294 1,543 1,428 1,145 1,020 1,027 1,03224.4 7.6 19.3 –7.5 –19.8 –11.0 0.7 0.5

complete and not absorbed 244 255 333 328 267 206 188 19237.1 4.7 30.3 –1.5 –18.6 –22.7 –8.8 2.1

absorptions 1,129 1,296 1,458 1,458 1,239 1,050 1,037 1,02818.5 14.7 12.5 0.1 –15.1 –15.2 –1.3 –0.9

months’ supply 2.6 2.4 2.7 2.7 2.6 2.4 2.2 2.2




U nit sales in the Montréal’s resale apartment con-dominium market are expected to rise this year. But slowing demand and high inventories will

take their toll on the new apartment condominium market, with starts expected to decline by 31.2 per cent in 2012 and 15.6 per cent next year.

Montréal’s resale apartment condominium market has

had an impressive run of growth. By last year, unit sales

of apartment condominiums topped 12,700 units, having

more than doubled in the last decade alone, while average

apartment prices rose above $250,000 for the first time.

This growth was partly driven by foreign investment, an

increasing number of young professionals wishing to live

downtown, and a rising proportion of the population aged

55 and older—a prime condominium buying group.

Indeed, by 2011, the percentage of the population over

the age of 55 in Montréal had reached 27 per cent, up

8 percentage points over the last 10 years.

Higher taxes and sluggish economic growth led to small

declines in unit sales through the middle of last year.

Demand slowed slightly again in the first quarter of

2012, and more weakness is expected in the second

quarter as consumers contend with a still modest econ-

omy, flat employment, and additional tax hikes. Still, on

an annual basis, unit sales are forecast to rise by 4.5 per

cent this year as the market picks up with increased

economic activity in the second half of the year. Even

stronger growth in active listings will result in the sales-

to-active-listings ratio falling to just under 12 per cent

on average this year, its lowest level in six years. At this

level, the resale market remains balanced, and so average

price growth is expected to be 3.4 per cent for 2012. A

stable economy, good population growth, and continued

increases in the population aged 55 and older are fore-

cast to help boost unit sales of apartment condominiums

by 3.2 per cent per year, on average, in 2013 and 2014.

But rising interest rates will then hold annual sales

monTréal



1992 2004 2016f0

5

10

15

20

25

3015–24 25–39 40–54 55–74 75+



1997 99 01 03 05 07 09 11 13f 15f

0

3,000

6,000

9,000

12,000

15,000

30

40

50

60

70

80




growth to a 1.1 per cent average through 2015–16.

With active listings expected to keep pace, average

price growth should increase from 2.4 per cent next

year to 3.8 per cent in 2016.

In the new apartment condominium market, cautious

consumers pulled back from the market as the global

recession unfolded in late 2008, causing builders to

reduce starts by 6.9 per cent in 2009. By 2010, inven-

tories had fallen back to their lowest level in six years,

and so builders returned to the market in droves: starts

rose by 38.1 per cent in 2010 and 19.8 per cent in 2011,

to reach a record 12,300 units last year. At the same time,

however, faced with higher taxes and lower economic

growth, buyers held back, leading to a much more mod-

erate rise in absorptions. As a result, inventories also

rose in 2011.

At 12,300 units, even with good population growth,

starts are well above the long-term average starts-to-

population ratio and so are unsustainable given demo-

graphic requirements. To get inventories back under

control, builders have already started to pull away from

the new apartment condominium market, reducing starts in



1998 00 02 04 06 08 10 12f 14f 16f10121416182022

4,0006,0008,00010,00012,00014,00016,000




1997 99 01 03 05 07 09 11 13f 15f5

101520253035

−50510152025

Sales-to-active-listings ratio (left)Average price growth (right)



1997 99 01 03 05 07 09 11 13f 15f

00.050.100.150.200.250.300.35




1997 99 01 03 05 07 09 11 13f 15f

−1

0

1

2

3

4



the final quarter of last year and through the first quarter

of 2012. Lower absorptions through the second half of

the year will prompt further cuts to starts. In all, starts

are forecast to fall nearly 47 per cent over this year and

next, before realigning with underlying demographics,

around 7,500 units annually, in 2015 and 2016.


2009 2010 2011 2012f 2013f 2014f 2015f 2016f

unit sales 11,852 12,652 12,762 13,333 13,785 14,212 14,439 14,5272.7 6.7 0.9 4.5 3.4 3.1 1.6 0.6

active listings 7,222 6,832 8,306 9,196 9,502 9,813 10,022 9,7672.9 –5.4 21.6 10.7 3.3 3.3 2.1 –2.5

months’ supply 7.3 6.5 7.8 8.3 8.3 8.3 8.3 8.1

average price 225,878 247,734 256,824 265,594 272,001 279,915 289,991 300,8994.1 9.7 3.7 3.4 2.4 2.9 3.6 3.8



2009 2010 2011 2012f 2013f 2014f 2015f 2016f

starts 7,452 10,293 12,329 8,479 7,154 7,287 7,444 7,541–6.9 38.1 19.8 –31.2 –15.6 1.9 2.2 1.3

under construction 5,800 7,803 10,617 11,149 10,085 10,127 10,105 10,091–4.7 34.5 36.1 5.0 –9.5 0.4 –0.2 –0.1

completions 7,284 7,197 9,442 10,047 7,453 7,255 7,450 7,56713.5 –1.2 31.2 6.4 –25.8 –2.7 2.7 1.6

complete and not absorbed 1,583 1,233 1,369 1,776 1,623 1,429 1,463 1,502–7.5 –22.1 11.1 29.7 –8.6 –12.0 2.4 2.7

absorptions 7,213 7,758 8,911 9,825 7,778 7,308 7,408 7,5306.6 7.5 14.9 10.3 –20.8 –6.0 1.4 1.6

months’ supply 2.6 1.9 1.8 2.2 2.5 2.3 2.4 2.4




P ublic sector layoffs will discourage growth in Ottawa’s resale and new apartment condominium markets this year. Unit sales of apartment condo-

miniums are expected to remain flat in 2012 after falling through the first quarter, while starts are forecast to increase by a modest 1.6 per cent as builders keep inventories contained.

After dropping in 2008 in line with the global recession,

unit sales in Ottawa’s resale apartment condominium

market rose 10.6 per cent in 2009 and 18.5 per cent in

2010. Price growth was also robust, with the median

price increasing nearly 24 per cent over the two years.

Sellers, spurred on by the higher prices, flocked to the

market in 2010, leading to a decline in the sales-to-

active-listing ratio to below 30 per cent for the first

time in four years.

Last year, a combination of the higher prices, tighter

mortgage rules, and renewed consumer cautiousness (this

time due to spending cutbacks in the public service sec-

tor) reduced demand once more. Unit sales of apartment

condominiums slipped 5.1 per cent. Meanwhile, sellers,

lured by the recent price increases, increased active list-

ings to near record levels. As a result, the sales-to-active-

listings ratio fell further. In turn, median price growth

finally began to moderate, easing to 1.4 per cent.

Although sales picked up in the second half of 2011, they

then declined again through the first quarter of 2012,

perhaps owing to persistent nervousness by consumers

as the federal government begins a series of layoffs in the

region. This weakness is expected to continue throughout

the year as well. Overall, unit sales of apartment condo-

miniums will be relatively flat in 2012, gaining just 0.3 per

cent. But a drop in active listings is anticipated to raise

the sales-to-active-listings ratio in 2012, strengthening

median price growth to a forecast 6.5 per cent this year.

Thanks to an improved economy next year, unit sales of

oTTaWa



1992 2004 2016f0

5

10

15

20

25

3015–24 25–39 40–54 55–74 75+



1997 99 01 03 05 07 09 11 13f 15f

0

400

800

1,200

1,600

0

7

14

21

28




apartment condominiums are anticipated to increase an

average of 2.5 per cent per year over 2013 and 2014.

Rising interest rates will then slow sales growth to 1.8

per cent in 2015 and 1 per cent in 2016. However, with

active listings continuing to fall from their near record

levels in 2011, the sales-to-active-listings ratio will

move up toward its long-term equilibrium over the

medium term. Accordingly, median price growth will

get stronger, going from 1.8 per cent next year to

5 per cent in 2016.

In the new market, starts topped 1,500 units in 2010,

as the recovery in the economy, low interest rates, and

spillover demand from the resale market brought both

builders and buyers back to the new market. But faced

with tighter mortgage rules and looming public service

sector layoffs, buyers lowered absorptions again in the

first half of 2011, driving inventories up to their highest

level since 1995. Builders responded with a 12 per cent

decline in starts last year.


f = forecastSources: The Conference Board of Canada; Canadian Real Estate Association.

1998 00 02 04 06 08 10 12f 14f 16f68

101214161820

6008001,0001,2001,4001,6001,8002,000




2002 04 06 08 10 12f 14f 16f10203040506070

−50510152025

Sales-to-active-listings ratio (left)Median price growth (right)



1997 99 01 03 05 07 09 11 13f 15f

00.020.040.060.080.100.120.14




1997 99 01 03 05 07 09 11 13f 15f

−2−1

0123456



After a pickup in late 2011, builders reduced starts of

apartment condominiums in the first quarter of this year

as inventories rose further, and more weakness is expected

for the rest of the year. Still, the growth recorded in late

2011 will help push starts up by 1.6 per cent this year, to

a forecast 1,350 units—still high by historical standards.

Accordingly, as the weakness in the public sector con-

tinues to hamper demand in the coming years, builders

are expected to lower starts gradually by an average of

1 per cent annually from 2014 to 2016.


2009 2010 2011 2012f 2013f 2014f 2015f 2016f

unit sales 1,549 1,835 1,741 1,746 1,799 1,837 1,869 1,88810.6 18.5 –5.1 0.3 3.0 2.1 1.8 1.0

active listings 363 560 700 667 528 478 463 461–7.3 54.3 25.0 –4.8 –20.8 –9.5 –3.1 –0.5

months’ supply 2.8 3.7 4.8 4.6 3.5 3.1 3.0 2.9

median price 220,764 257,777 261,442 278,489 283,606 291,367 305,371 320,7226.9 16.8 1.4 6.5 1.8 2.7 4.8 5.0

f = forecastItalics indicate percentage change.Sources: The Conference Board of Canada; Canadian Real Estate Association; CMHC Housing Time Series Database.


2009 2010 2011 2012f 2013f 2014f 2015f 2016f

starts 927 1,509 1,327 1,349 1,213 1,167 1,166 1,175–38.2 62.8 –12.0 1.6 –10.1 –3.8 –0.1 0.9

under construction 1,875 1,830 1,899 1,734 1,795 1,790 1,794 1,7893.8 –2.4 3.8 –8.7 3.5 –0.3 0.2 –0.3

completions 945 1,443 1,311 1,391 1,212 1,169 1,163 1,179–9.7 52.7 –9.1 6.0 –12.8 –3.6 –0.5 1.4

complete and not absorbed 148 129 157 184 174 182 186 186–9.9 –12.7 22.0 16.9 –5.6 4.8 2.1 –0.1

absorptions 951 1,462 1,317 1,324 1,226 1,164 1,156 1,173–15.2 53.8 –10.0 0.5 –7.4 –5.0 –0.7 1.5

months’ supply 1.9 1.1 1.4 1.7 1.7 1.9 1.9 1.9




U nit sales in Toronto’s resale market are forecast to fall by 1.2 per cent in 2012, in line with modest economic growth and federal efforts to calm over-

heated markets. Starts in the new market will drop 2.2 per cent, even after hitting record levels in the first quarter.

A new land transfer tax and the global recession ended an

impressive string of growth in Toronto’s resale apartment

condominium market in 2008. Unit sales fell 15.7 per

cent that year, while median price growth slowed to 4 per

cent. Demand accelerated again in 2009 and 2010 as the

economy recovered, pushing sales up by nearly 19 per

cent over the two years. The resulting increase in the

sales-to-active-listings ratio, to 41.9 per cent—its high-

est level in nine years—then sparked growth in median

apartment prices of 6 per cent in 2009 and 10.2 per cent

in 2010.

In spite of weaker economic growth, continued low

interest rates kept demand in the resale apartment con-

dominium market strong through much of last year as

well. Sales increased 5.6 per cent in 2011, to just under

23,000 units, while the median apartment price increased

by 7.4 per cent, topping $300,000 for the first time. But

with economic growth remaining modest and with the

federal government introducing tighter mortgage rules,

sales are forecast to fall 1.2 per cent this year and rise

by only 0.7 per cent in 2013. In turn, continued declines

in the sales-to-active-listings ratio will hold price increases

to 1.3 per cent this year and 2.5 per cent next year.

Through the medium term, stronger economic growth

and continued healthy population increases will initially

help to boost unit sales once more, up by 2.5 per cent in

2014. But higher interest rates are then expected to take

their toll on demand, slowing sales growth to 2 per cent

ToronTo



1992 2004 2016f

0

5

10

15

20

25

3015–24 25–39 40–54 55–74 75+



1997 99 01 03 05 07 09 11 13f 15f

0

5,000

10,000

15,000

20,000

25,000

25

35

45

55

65

75




in 2015 and 1.5 per cent in 2016. Meanwhile, price

growth is anticipated to average 3.6 per cent per year

from 2014 onward.

Builders doubled the number of apartment condominium

starts in 2008, partly in response to higher demand from

investors looking for opportunities outside the struggling

U.S. market. But the market came crashing back down

at the end of that year, as the global recession took its

toll on the local economy. Starts dropped by over 50 per

cent in 2009, before low inventories then spurred build-

ers to increase starts again in 2010, bringing them back

to 19,000 units for 2011. While absorptions also rose

through 2010–11, inventories began to creep up once

more as well. Nevertheless, given falling vacancy rates

in the rental market and continued demand from foreign

investors, builders forged ahead in the first quarter of

this year, raising starts to a whopping 29,400 units at an

annual rate. Builders were also likely taking advantage

of a warmer-than-usual winter to accelerate their con-

struction plans.

With inventories still moving upward, and the ratio

of condominium starts to population growth now well

above its long-term average, the new apartment condo-

minium market is expected slow through the rest of 2012

and into 2013. But a decent, though modest, economy

and solid demographics (including Toronto’s constantly



1998 00 02 04 06 08 10 12f 14f 16f8

101214161820

10,00013,00016,00019,00022,00025,00028,000




1997 99 01 03 05 07 09 11 13f 15f25

30

35

40

45

0

3

6

9

12




1997 99 01 03 05 07 09 11 13f 15f

0

0.05

0.10

0.15

0.20

0.25Current year 20-year average



1997 99 01 03 05 07 09 11 13f 15f

−2

−1

0

1

2

3

4

5



growing immigrant community, which adds over

100,000 newcomers to Toronto on average each year),

the two ingredients ultimately underpinning any healthy

housing market, will help contain the damage. Indeed,

while the vacancy rate will likely rise as units now under

construction hit the market, population growth should

limit the increase. Accordingly, starts are forecast to

fall 2.2 per cent this year and 16.2 per cent in 2013

before rising by a modest 1.9 per cent annually

from 2014 to 2016.


2009 2010 2011 2012f 2013f 2014f 2015f 2016f

unit sales 21,227 21,701 22,906 22,636 22,786 23,352 23,827 24,19016.4 2.2 5.6 –1.2 0.7 2.5 2.0 1.5

active listings 4,217 5,182 5,191 5,484 5,614 5,780 5,941 6,092–18.3 22.9 0.2 5.6 2.4 3.0 2.8 2.5

months’ supply 2.4 2.9 2.7 2.9 3.0 3.0 3.0 3.0

median price 254,378 280,333 300,946 304,755 312,352 323,407 334,828 347,2486.0 10.2 7.4 1.3 2.5 3.5 3.5 3.7



2009 2010 2011 2012f 2013f 2014f 2015f 2016f

starts 10,954 11,586 19,153 18,724 15,689 15,956 16,206 16,605–50.8 5.8 65.3 –2.2 –16.2 1.7 1.6 2.5

under construction 35,189 32,897 32,694 35,413 33,054 33,159 33,087 33,09510.4 –6.5 –0.6 8.3 –6.7 0.3 –0.2 0.0

completions 12,212 14,948 17,451 19,019 16,004 15,985 16,240 16,600–8.7 22.4 16.7 9.0 –15.9 –0.1 1.6 2.2

complete and not absorbed 278 756 717 897 792 736 766 81019.2 171.8 –5.1 25.1 –11.6 –7.1 4.1 5.7

absorptions 12,206 14,444 17,370 18,982 16,191 15,961 16,221 16,530–8.1 18.3 20.3 9.3 –14.7 –1.4 1.6 1.9

months’ supply 0.3 0.6 0.5 0.6 0.6 0.6 0.6 0.6




J ob gains, population growth, and low interest rates will support condominium demand in Calgary. A balanced resale market is expected this year, with moderate

sales increases and resumed price growth. Falling unsold builder stocks will help lift starts in 2012, before they drop in 2013.

The market for new condominium apartments is

regaining its footing in Calgary. Although new unit

absorptions fell sharply in 2011, this mainly reflected

sagging completions, themselves the product of weak

starts following the 2009 recession. More importantly,

unsold builder inventories have generally eased. Although

these ticked up in the first quarter of this year, such a

wintertime increase is common in Calgary and followed

significant declines in two of the previous three quarters.

More broadly, inventories remain below year-earlier

levels and are expected to keep easing through most

of the next two years. This reflects both a recovering

Calgary economy and pent-up demand. Employment

rose in 2011, following two annual declines, and the

ratio of starts to population growth barely exceeded its

20-year average last year after trailing it sharply in both

2009 and 2010. Accordingly, we expect condo starts to

hit a four-year high of nearly 2,400 units in 2012 and to

generally rise throughout our forecast. Still, the 2016

level of 2,753 starts will be well below the 2008 peak

of more than 5,300 units.

The local resale market is stabilizing after a shortage

of listings in early 2011 prompted an abrupt tightening.

Although supply rose throughout the year, average listings

over the full year were the fewest since 2006. Combined

with a slight increase in sales during 2011, this lifted the

full-year sales-to-active-listings ratio to 31 per cent, the

highest since 2007. But the ongoing supply hikes, com-

bined with generally steady sales, cut the ratio to 23 per

cent by the fourth quarter and, further, to 21 per cent by

the first quarter of 2012. High sales-to-new-listings

ratios during the boom period prior to the recession

calGary



1992 2004 2016f

05

101520253035

15–24 25–39 40–54 55–74 75+



1997 99 01 03 05 07 09 11 13f 15f

01,0002,0003,0004,0005,0006,000

20304050607080




make it difficult to determine what constitutes a balanced

market here. But it seems likely that a sales-to-listings

ratio hovering just above 20 per cent is at the low end

of this range. Similar readings in the past have been

associated with price increases near 2 per cent—still

positive growth, but below the long-term average. We

expect largely stable sales and gently easing listings to

lift the ratio as 2012 progresses, with its value approach-

ing 25 per cent by the fourth quarter. Next year will see

further moderate listings declines combine with small

sales increases to lift the ratio to nearly 27 per cent by

the end of 2013, solidly positioning the Calgary resale

market in balanced territory.

A weakening market balance trimmed prices during the

second half of 2011. For the full year, the median price

fell 2.3 per cent, the second drop in the past three years.

A slightly tightening market balance will prompt price

growth approaching 3 per cent in 2013.



1998 00 02 04 06 08 10 12f 14f 16f6

8

10

12

14

1,000

2,000

3,000

4,000

5,000




1997 99 01 03 05 07 09 11 13f 15f0

20406080

100120

−1001020304050




1997 99 01 03 05 07 09 11 13f 15f

0

0.05

0.10

0.15




1997 99 01 03 05 07 09 11 13f 15f

−2

0

2

4

6

8

10



Relatively high local incomes, combined with middle-

of-the-pack condominium prices, give Calgary the best

affordability among the eight cities covered in this report.

Principle and interest charges are expected to consume

only 8.9 per cent of local incomes during 2012, down

from 9.2 per cent in 2011 and a peak of 12.7 per cent in

2007. Affordability is expected to remain good in 2013

as interest rates stay moderate and the median price rises

at roughly the same pace as the expected increase in

household income.


2009 2010 2011 2012f 2013f 2014f 2015f 2016f

unit sales 3,956 3,257 3,425 3,555 3,621 3,675 3,725 3,76214.1 –17.7 5.2 3.8 1.9 1.5 1.4 1.0

active listings 1,178 1,267 919 1,270 1,151 1,132 1,100 1,042–35.0 7.5 –27.4 38.1 –9.3 –1.7 –2.8 –5.3

months’ supply 3.6 4.7 3.2 4.3 3.8 3.7 3.5 3.3

median price 241,542 242,925 237,354 239,445 246,414 254,963 264,429 272,932–6.2 0.6 –2.3 0.9 2.9 3.5 3.7 3.2



2009 2010 2011 2012f 2013f 2014f 2015f 2016f

starts 383 1,063 2,055 2,373 2,097 2,369 2,564 2,753–92.8 177.5 93.3 15.5 –11.7 13.0 8.2 7.4

under construction 5,355 3,387 3,174 3,982 3,757 3,716 3,642 3,603–35.9 –36.8 –6.3 25.5 –5.6 –1.1 –2.0 –1.1

completions 2,164 2,768 662 2,320 2,130 2,429 2,643 2,761–53.2 27.9 –76.1 250.6 –8.2 14.0 8.8 4.4

complete and not absorbed 275 579 470 444 261 206 200 211399.1 110.8 –18.8 –5.5 –41.2 –21.2 –2.6 5.3

absorptions 1,890 2,533 961 2,154 2,381 2,425 2,643 2,752–58.6 34.0 –62.1 124.2 10.5 1.8 9.0 4.1

months’ supply 1.7 2.7 5.9 2.5 1.3 1.0 0.9 0.9




L ow interest rates and employment gains will ultim-ately fuel a stronger apartment condominium mar-ket in Edmonton, but another relatively weak year

is expected in 2012, with sales, starts, and resale prices all falling. Next year looks significantly better, as sales, the median existing apartment price, and starts are all expected to rise.

The new condominium market in Edmonton is settling

following large swings induced by the recession. The

big drop in condominium starts during 2009 is being felt

now at the other end of the product pipeline. Completions

in both 2010 and 2011 were roughly a third of their 2009

peak. Absorptions are also soft; they fell for a second

consecutive year in 2011 and remain well below boom-era

levels. Still, absorptions picked up in the second half of

the year, trimming builder inventories of unsold units

for 2011; these stocks fell again in the first quarter of

2012 as completions fell more than absorptions. We

expect absorptions to strengthen throughout 2012, but

still end the year down slightly—the second straight

annual drop. But inventories will also ease, because

completions are forecast to fall even faster. These falling

inventories should ultimately encourage builders. There

is also evidence of pent-up demand, since the ratio of

condominium starts to population growth has lagged its

20-year average since 2008. Despite this, apartment

condominium starts are forecast to dip to just over

1,100 units in 2012, the second straight drop, pulled

down by a weak first-quarter showing. Next year looks

significantly better, with starts forecast to hit a five-year

high of 1,600 units—still less than half the 2007 peak.

The market for existing apartment condominiums is hav-

ing difficulty gaining traction and remains in a buyers’

position. Despite dips in both the first and the fourth

quarter of last year, sales rose 4.5 per cent for the year

2011 as a whole. This modest gain followed a 16 per

cent drop during 2010 and left volumes down more

EdmonTon



1992 2004 2016f

0

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10

15

20

25

3015–24 25–39 40–54 55–74 75+



1997 99 01 03 05 07 09 11 13f 15f

0

1,000

2,000

3,000

4,000

20

30

40

50

60




than 40 per cent from their 2007 peak. Sales are

expected to fall a further 9.6 per cent in 2012 to near

2,340 units before rebounding 3.7 per cent in 2013.

This uneven sales performance has made potential con-

dominium vendors nervous. Listings fell 13.4 per cent

in 2011, before rising in the first quarter of 2012. We

expect the weak market to trim listings another 9 per

cent overall this year and more quickly in 2013. Still,

vendors can take some encouragement from the slight

but steady rise in the sales-to-active-listings ratio, which

averaged 17.5 per cent last year, up from 14.5 per cent

in 2010. Drops in both sales and listings are expected

to leave the ratio little changed this year, but the falling

listings and rising sales forecast for 2013 will lift it to a

roughly balanced-market reading near 25 per cent.

Ongoing market weakness has been reflected in soggy

apartment condominium values, with the median price

falling by a total of 8.5 per cent over the past four years,

following spectacular increases prior to the global reces-

sion. Another 1.9 per cent price drop is on tap for this

year, but a firming market will finally produce a 3.2 per

cent rise in 2013.



1998 00 02 04 06 08 10 12f 14f 16f5

7

9

11

13

15

0

1,000

2,000

3,000

4,000

5,000




1997 99 01 03 05 07 09 11 13f 15f0

20406080

100120

−1001020304050




1997 99 01 03 05 07 09 11 13f 15f

0

0.05

0.10

0.15




1997 99 01 03 05 07 09 11 13f 15f

−101234567



Apartment condominium affordability is good in

Edmonton. Principle and interest charges on the median-

priced unit consumed only 9.8 per cent of the average

household income in 2011. This bite is forecast to ease

even further in 2012 as condominium prices dip and

interest rates remain low.


2009 2010 2011 2012f 2013f 2014f 2015f 2016f

unit sales 2,933 2,472 2,583 2,336 2,423 2,482 2,524 2,5494.0 –15.7 4.5 –9.6 3.7 2.5 1.7 1.0

active listings 1,327 1,421 1,231 1,121 823 804 794 791–27.4 7.0 –13.4 –8.9 –26.6 –2.3 –1.2 –0.4

months’ supply 5.4 6.9 5.7 5.8 4.1 3.9 3.8 3.7

median price 218,075 217,438 212,678 208,649 215,290 223,226 231,203 238,988–5.6 –0.3 –2.2 –1.9 3.2 3.7 3.6 3.4



2009 2010 2011 2012f 2013f 2014f 2015f 2016f

starts 453 1,463 1,369 1,133 1,598 1,822 1,968 2,072–81.9 223.0 –6.4 –17.2 41.0 14.0 8.0 5.3

under construction 3,986 2,599 2,953 2,988 3,092 3,073 3,059 3,036–44.7 –34.8 13.6 1.2 3.5 –0.6 –0.5 –0.8

completions 3,987 1,321 1,336 1,112 1,573 1,831 1,993 2,09068.5 –66.9 1.1 –16.8 41.4 16.4 8.9 4.9

complete and not absorbed 525 645 666 507 428 441 473 492303.8 22.8 3.3 –23.9 –15.6 3.0 7.2 4.1

absorptions 3,383 1,449 1,366 1,288 1,579 1,804 1,974 2,06348.8 –57.2 –5.7 –5.7 22.7 14.2 9.4 4.5

months’ supply 1.9 5.3 5.9 4.7 3.3 2.9 2.9 2.9




V ancouver’s condominium market is correcting as the tide of offshore investment recedes, exposing its poor affordability. Still, decent local employ-

ment growth and continued low interest rates will provide a cushion. And apartment condominiums remain a relatively affordable housing solution in a pricey city. There is down-side risk, however, if Chinese demand plunges.

Both new and resale markets for apartment condomin-

iums are slow in Vancouver. New construction must

compete with persistently high unsold unit inventories,

although these were down in 2011 after a big run-up in

2010. Inventory declines during the first three quarters

of 2011 were mostly due to a relatively large drop in

the supply of completions, because absorption demand

also fell. The fourth quarter, though, saw a big jump in

absorptions outweigh a smaller rise in completions. By

the fourth quarter of 2011, inventories stood 26 per cent

below a year earlier, leaving average stocks for the entire

year at near 1,500 units, down 18 per cent from the 2010

level. Such levels are vastly above those seen prior to the

global recession, but still only about half those that plagued

the Vancouver market during the mid-1990s. The mar-

ket managed to erase the mid-1990s inventories and it

will eventually trim the current backlog. But this year

will see a slight setback as completions rise faster than

absorptions and lift builder stocks to nearly 1,600 units.

Real gains are expected to begin in 2013 as further

absorption advances are forecast to cut inventories

12 per cent.

This murky environment is keeping developers wary.

Condominium starts have improved, with a 23 per cent

gain last year lifting volumes above 7,100 units from a

2009 trough below 2,400 units. But this was barely half

the 2007 peak, and starts are forecast to drop 8 per cent

in 2012. An expected 6 per cent rise in starts next year

will not fully erase the 2012 dip.

vancouvEr



1992 2004 2016f

0

5

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15

20

25

3015–24 25–39 40–54 55–74 75+



1997 99 01 03 05 07 09 11 13f 15f

0

3,000

6,000

9,000

12,000

15,000

30

40

50

60

70

80




The resale market is in a buyers’ state. Sales eased 2 per

cent to below 13,000 units last year and remain well

off their 2005 peak above 17,100 units. An 18 per cent

plunge in volumes during the first quarter of 2012 will

set the tone for a forecast 6 per cent decline to just

over 12,000 units this year. Sales are forecast to

recover slightly to 12,400 units in 2013.

The tepid resale market is discouraging potential condo-

minium vendors: the supply of listings fell 8 per cent in

2011, with a particularly large 11 per cent tumble in the

fourth quarter. This still left the sales-to-active-listings

ratio at 21.4 per cent in the fourth quarter, which is con-

sistent with a buyers’ market. For all of 2011, this ratio

averaged 19.9 per cent. Accordingly, price growth

slowed to 2.5 per cent for all of 2011, with an actual

sag in the price level during the third quarter. Although

2012 began with a first-quarter price increase, values

are forecast to decline through the rest of the year and

end 2012 down 4.7 per cent. Another 2 per cent drop is

expected in 2013. This two-year decline in prices will

still leave the median apartment condominium price in

Vancouver nearly twice its 2003 level.



1998 00 02 04 06 08 10 12f 14f 16f1214161820222426

5,0007,0009,00011,00013,00015,00017,00019,000




1997 99 01 03 05 07 09 11 13f 15f10

20

30

40

50

−10

0

10

20

30




1997 99 01 03 05 07 09 11 13f 15f0

0.1

0.2

0.3

0.4




1997 99 01 03 05 07 09 11 13f 15f

−1

0

1

2

3

4



Declining prices will partially alleviate Vancouver’s

very poor affordability—the worst among our report’s

eight cities. Principle and interest payments on the

median condominium unit are forecast to consume

20.3 per cent of average household incomes in 2012

and 19.2 per cent in 2013, down from 22.1 per cent

in 2011.


2009 2010 2011 2012f 2013f 2014f 2015f 2016f

unit sales 15,245 13,083 12,836 12,035 12,410 12,932 13,117 13,24938.4 –14.2 –1.9 –6.2 3.1 4.2 1.4 1.0

active listings 4,724 5,842 5,382 5,769 4,857 4,427 4,103 3,989–25.7 23.7 –7.9 7.2 –15.8 –8.9 –7.3 –2.8

months’ supply 3.7 5.4 5.0 5.8 4.7 4.1 3.8 3.6

median price 335,462 363,996 373,077 355,406 348,152 354,557 367,616 385,941–0.3 8.5 2.5 –4.7 –2.0 1.8 3.7 5.0



2009 2010 2011 2012f 2013f 2014f 2015f 2016f

starts 2,355 5,793 7,136 6,556 6,940 7,977 8,774 9,429–79.5 146.0 23.2 –8.1 5.8 15.0 10.0 7.5

under construction 13,558 7,761 10,010 10,903 10,436 10,517 10,457 10,454–28.3 –42.8 29.0 8.9 –4.3 0.8 –0.6 0.0

completions 9,250 8,124 4,583 6,925 6,926 8,003 8,792 9,476–20.9 –12.2 –43.6 51.1 0.0 15.5 9.9 7.8

complete and not absorbed 590 1,818 1,499 1,582 1,391 1,333 1,206 1,20770.8 208.0 –17.5 5.6 –12.1 –4.2 –9.5 0.1

absorptions 9,102 6,761 5,113 6,909 7,101 8,096 8,882 9,435–19.3 –25.7 –24.4 35.1 2.8 14.0 9.7 6.2

months’ supply 0.8 3.2 3.5 2.7 2.4 2.0 1.6 1.5




P oor affordability, sagging employment, and altered individual retirement plans due to the global financial meltdown confront Victoria’s condominium market.

The resale side remains in a buyers’ state and faces a second year of falling prices. High inventories plague the new con-struction market, and so only small increases in starts are forecast for 2012 and 2013.

Both new and resale markets for condominiums in Victoria

are weak. The new construction market continues to suf-

fer from high unsold stocks. Developers seem to have

overcompensated for a dip in starts below demographic

requirements in 2009 and early 2010, and many new

units now sit vacant. Such inventories had edged lower

during the first half of 2011, but then bounced up to end

the year at a two-year high. A jump in completions in the

fourth quarter of 2011 was not met by equivalent absorp-

tions. For all of 2011, inventories averaged 300 units, the

third straight year near this level. This unsettled develop-

ers who had enjoyed ultra-low inventories averaging

35 units per year between 2002 and 2007. Only slight

improvement is expected during 2012, since absorptions

are forecast to just exceed completions. A bigger inven-

tory drop is forecast for 2013. Accordingly, starts will

remain near 500 units in 2012 and 540 units in 2013,

above their 2009 trough, but well off the past decade’s

annual average of 785 units.

The local apartment condominium resale market has

remained in a buyers’ state for much of the last two

years. Sales suffered consecutive annual declines in

2010 and in 2011, as their level stood a third below

their 2007 peak. Values have also been weak. A slight

rise in sales during late 2010 and early 2011 attracted

a small pickup in listings during the first three quarters

of 2011, but sales fell back during the second quarter,

prompting an 8 per cent listings dip in the fourth quarter.

vicToria



1992 2004 2016f

0

5

10

15

20

25

3015–24 25–39 40–54 55–74 75+



1997 99 01 03 05 07 09 11 13f 15f

0

300

600

900

1,200

1,500

0

20

40

60

80

100




Still, the mid-year hike was sufficient to boost active

listings for all of 2011 to 1,024 units on average, the

most since 2008.

Sagging sales and rising listings cut the ratio of sales

to active listings to a three-year low of 13.4 per cent in

2011, well into buyers’ market territory. The ratio started

the year near 15 per cent, but fell below 13 per cent in

the third quarter. We estimate that Victoria’s condomin-

ium market is balanced when the ratio is near 23 per

cent. Pricing has suffered accordingly. Although values

rose in both the first and second quarters, a 5.3 per cent

collapse in the third quarter alone erased these gains,

and a fourth-quarter pickup failed to recapture them.

This cut the median apartment price 1.2 per cent for

2011 as a whole, the second decline in the past three

years. Notwithstanding this decline, the median local

condominium price hit an all-time high in 2010 and is

expected to exceed this by 2014. Victoria remains the

third priciest of our eight markets, behind Vancouver

and Toronto (measured by the last annual historical

level recorded, i.e., 2011). This year, though, looks

weak, with the median price falling 3.3 per cent.



1998 00 02 04 06 08 10 12f 14f 16f1012141618202224

5008001,1001,4001,7002,0002,3002,600




1997 99 01 03 05 07 09 11 13f 15f5

1015202530354045

−15−10−50510152025




1997 99 01 03 05 07 09 11 13f 15f0

0.1

0.2

0.3

0.4




1997 99 01 03 05 07 09 11 13f 15f

−4

−2

0

2

4

6



Affordability remains an issue in Victoria, despite easing

prices and low interest rates. Principle and interest pay-

ments on the average condominium consumed 19.1 per

cent of household income in 2011, little changed from

the proportion of the past three years and below only

Vancouver among the cities in this report. Another year

of falling prices in 2012, however, is forecast to cut

Victoria’s proportion to 17.9 per cent this year, below

Montréal as well.


2009 2010 2011 2012f 2013f 2014f 2015f 2016f

unit sales 2,188 1,824 1,648 1,622 1,705 1,744 1,699 1,67123.0 –16.6 –9.6 –1.6 5.1 2.3 –2.5 –1.6

active listings 793 908 1,024 904 745 678 655 638–31.3 14.5 12.8 –11.6 –17.7 –8.9 –3.4 –2.6

months’ supply 4.3 6.0 7.5 6.7 5.2 4.7 4.6 4.6

median price 278,829 290,696 287,237 277,752 284,710 295,199 309,125 321,634–2.2 4.3 –1.2 –3.3 2.5 3.7 4.7 4.0



2009 2010 2011 2012f 2013f 2014f 2015f 2016f

starts 139 801 491 506 541 594 615 628–85.0 476.3 –38.6 3.0 6.8 9.8 3.6 2.0

under construction 1,170 959 882 874 930 938 945 948–49.5 –18.1 –8.0 –0.9 6.4 0.9 0.8 0.3

completions 1,559 555 446 533 518 586 609 62653.0 –64.4 –19.7 19.6 –2.8 13.2 3.9 2.7

complete and not absorbed 306 299 301 296 217 202 185 18069.7 –2.4 0.6 –1.6 –26.8 –6.8 –8.2 –3.0

absorptions 1,484 557 437 581 574 605 630 62973.6 –62.5 –21.6 32.9 –1.1 5.4 4.1 –0.2

months’ supply 2.5 6.4 8.3 6.1 4.5 4.0 3.5 3.4



Terminology used in the Metropolitan Condo Outlook:1

housing starts—Refers to the beginning of construction

work on a building, usually when the concrete has been

poured for the entire footing around the structure, or at

an equivalent stage where a basement will not be part

of the structure.

multiple starts—The sum of semi-detached starts, row

starts, and apartment and other non-single-detached

starts. These starts are distributed among five tenures:

homeownership, rental, condominium, co-op, and other.

under construction—Units started but not completed.

completions—Refers to units where all the proposed

construction work has been performed or, in some cases,

where 90 per cent of construction work has been com-

pleted and the structure is fit for occupancy.

complete and not absorbed—Refers to inventories of newly

completed units that remain unoccupied.

absorptions—Newly completed units sold or rented.

Units pre-sold or pre-leased are not included until the

completion stage.

short-term supply—The number of months needed

to absorb unoccupied units. It is defined as the ratio

between unoccupied units and absorbed units (average

for the last 12 months).

1 Sourced from: The Conference Board of Canada; Canada Mortgage and Housing Corporation; Canadian Real Estate Association; Quebec Federation of Real Estate Boards.

long-term supply—The number of months needed to

absorb units under construction and those complete

and unoccupied (total supply). It is defined as the ratio

between total supply and absorbed units (average for the

last 12 months).

months’ supply (new condos)—The number of months

needed to absorb units that are completed but not absorbed.

unit sales—The number of existing condo apartments

sold on the Multiple Listing Service (MLS).

active listings—The number of condo apartments for

sale on the MLS.

sales-to-active-listings ratio—The number of condo

apartments sold divided by the number of active condo

apartment listings.

months’ supply (resale)—The number of months needed

to sell the current supply of active listings, based on an

average of recent months’ sales volumes.

median resale price—The median price of all resale apart-

ment condominium units sold on the MLS. The average

price is used for Montréal and Québec City. Data do not

generally include figures for new construction sales.

average resale price—The average resale condo price in

Montréal and Québec City. These data cover sales of all

condominium types, not just apartments. Data do not

generally include figures for new construction sales.

dEfiniTions and concEPTs



sTandard GEoGraPhical classificaTion (sGc) 2006

mETroPoliTan arEas WiTh ThEir comPonEnT cEnsus suBdivisions

Québec city

Beaumont Municipality

Boischatel Municipality

Château-Richer City

Fossambault-sur-le-Lac City

Lac-Beauport Municipality

Lac-Delage City

Lac-Saint-Joseph City

L’Ancienne-Lorette City

L’Ange-Gardien Parish (Municipality of)

Lévis City

Notre-Dame-des-Anges Parish (Municipality of)

Québec City

Saint-Augustin-de-Desmaures City

Sainte-Brigitte-de-Laval Municipality

Sainte-Catherine-de-la-Jacques-Cartier City

Sainte-Famille Parish (Municipality of)

Sainte-Pétronille Village

Saint-François-de-l’Île-d’Orléans Municipality

Saint-Gabriel-de-Valcartier Municipality

Saint-Henri Municipality

Saint-Jean-de-l’Île-d’Orléans Municipality

Saint-Lambert-de-Lauzon Parish (Municipality of)

Saint-Laurent-de-l’Île-d’Orléans Municipality

Saint-Pierre-de-l’Île-d’Orléans Municipality

Shannon Municipality

Stoneham-et-Tewkesbury United Townships (Municipality of)

Wendake Indian reserve

montréal

Baie-d’Urfé City

Beaconsfield City

Beauharnois City

Beloeil City

Blainville City

Boisbriand City

Bois-des-Filion City

BoucherCity City

Brossard City

Candiac City

Carignan City

Chambly City

Charlemagne City

Châteauguay City

Coteau-du-Lac Municipality

Côte-Saint-Luc City

Delson City

Deux-Montagnes City

Dollard-des-Ormeaux City

Dorval Cité

Gore Township (Municipality of)

Hampstead City

Hudson City

Kahnawake Indian reserve

Kanesatake Indian settlement

Kirkland City

La Prairie City

L’Assomption City

Laval City

Lavaltrie City

L’Épiphanie Parish (Municipality of)

L’Épiphanie City

Léry City

Les Cèdres Municipality

Les Coteaux Municipality

L’Île-Cadieux City

L’Île-Dorval City

L’Île-Perrot City

Longueuil City

Lorraine City

Mascouche City

McMaster City Municipality

Mercier City

Mirabel City

Montréal City

Montréal-Est City

Montréal-Ouest City

name Type name Type



Mont-Royal City

Mont-Saint-Hilaire City

Notre-Dame-de-l’Île-Perrot City

Oka Municipality

Otterburn Park City

Pincourt City

Pointe-Calumet Municipality

Pointe-Claire City

Pointe-des-Cascades Village

Repentigny City

Richelieu City

Rosemère City

Saint-Amable Municipality

Saint-Basile-le-Grand City

Saint-Bruno-de-MontarCity City

Saint-Colomban Parish (Municipality of)

Saint-Constant City

Sainte-Anne-de-Bellevue City

Sainte-Anne-des-Plaines City

Sainte-Catherine City

Sainte-Julie City

Sainte-Marthe-sur-le-Lac City

Sainte-Thérèse City

Saint-Eustache City

Saint-Isidore Parish (Municipality of)

Saint-Jérôme City

Saint-Joseph-du-Lac Municipality

Saint-Lambert City

Saint-Lazare City

Saint-Mathias-sur-Richelieu Municipality

Saint-Mathieu Municipality

Saint-Mathieu-de-Beloeil Municipality

Saint-Philippe Municipality

Saint-Placide Municipality

Saint-Sulpice Parish (Municipality of)

Saint-Zotique Village

Senneville Village

Terrasse-Vaudreuil Municipality

Terrebonne City

Varennes City

Vaudreuil-Dorion City

Vaudreuil-sur-le-Lac Village

Verchères Municipality

Westmount City

ottawa

Clarence-Rockland City

Ottawa City

Russell Township

Toronto

Ajax Town

Aurora Town

Bradford West Gwillimbury Town

Brampton City

Caledon Town

Chippewas of Georgina Island First Nation

Indian reserve

East Gwillimbury Town

Georgina Town

Halton Hills Town

King Township

Markham Town

Milton Town

Mississauga City

Mono Town

New Tecumseth Town

Newmarket Town

Oakville Town

Orangeville Town

Pickering City

Richmond Hill Town

Toronto City

Uxbridge Township

Vaughan City

Whitchurch-Stouffville Town

calgary

Airdrie City

Beiseker Village

Calgary City

Chestermere Town

Cochrane Town

Crossfield Town

Irricana Village

Rocky View No. 44 Municipal district

Tsuu T’ina Nation 145 (Sarcee 145) Indian reserve

name Type name Type



Edmonton

Alexander 134 Indian reserve

Beaumont Town

Betula Beach Summer village

Bon Accord Town

Bruderheim Town

Calmar Town

Devon Town

Edmonton City

Fort Saskatchewan City

Gibbons Town

Golden Days Summer village

Itaska Beach Summer village

Kapasiwin Summer village

Lakeview Summer village

Leduc City

Leduc County County (municipality)

Legal Town

Morinville Town

New Sarepta Village

Parkland County County (municipality)

Point Alison Summer village

Redwater Town

Seba Beach Summer village

Spring Lake Village

Spruce Grove City

St. Albert City

Stony Plain Town

Stony Plain 135 Indian reserve

Strathcona County Specialized municipality

Sturgeon County Municipal district

Sundance Beach Summer village

Thorsby Village

Wabamun Village

Wabamun 133A Indian reserve

Wabamun 133B Indian reserve

Warburg Village

vancouver

Anmore Village

Barnston Island 3 Indian reserve

Belcarra Village

Bowen Island Island municipality

Burnaby City

Burrard Inlet 3 Indian reserve

Capilano 5 Indian reserve

Coquitlam City

Coquitlam 1 Indian reserve

Coquitlam 2 Indian reserve

Delta District municipality

Greater Vancouver A Regional district electoral area

Katzie 1 Indian reserve

Katzie 2 Indian reserve

Langley City

Langley District municipality

Langley 5 Indian reserve

Lions Bay Village

Maple Ridge District municipality

Matsqui 4 Indian reserve

McMillan Island 6 Indian reserve

Mission 1 Indian reserve

Musqueam 2 Indian reserve

Musqueam 4 Indian reserve

New Westminster City

North Vancouver City

North Vancouver District municipality

Pitt Meadows District municipality

Port Coquitlam City

Port Moody City

Richmond City

Semiahmoo Indian reserve

Seymour Creek 2 Indian reserve

Surrey City

Tsawwassen Indian reserve

Vancouver City

West Vancouver District municipality

White Rock City

Whonnock 1 Indian reserve

victoria

Becher Bay 1 Indian reserve

Capital H (Part 1) Regional district electoral area

Central Saanich District municipality

Cole Bay 3 Indian reserve

Colwood City

East Saanich 2 Indian reserve

Esquimalt District municipality

Esquimalt Indian reserve

Highlands District municipality

Langford City

name Type name Type



South Saanich 1 Indian reserve

T’Sou-ke 1 (Sooke 1) Indian reserve

T’Sou-ke 2 (Sooke 2) Indian reserve

Union Bay 4 Indian reserve

Victoria City

View Royal Town

Metchosin District municipality

New Songhees 1A Indian reserve

North Saanich District municipality

Oak Bay District municipality

Saanich District municipality

Sidney Town

Sooke District municipality

name Type name Type

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Documents

Metropolitan Condo Outlook: Summer 2012€¦ · private residential mortgage insurer since 1995. Known as “The Homeownership Company,” it provides default mort- gage insurance