TORONTO — A recent Re/Max Canada report reveals that condo inventory is increasing in many major Canadian markets as more sellers list their properties, anticipating a rebound in demand from potential buyers.
The report, which analyzed condominium activity from January to August this year, highlights that British Columbia’s Fraser Valley experienced the largest year-over-year growth in inventory, with a 58.7% increase. This was followed closely by the Greater Toronto Area (GTA) at 52.8% and Calgary at 52.4%.
Other regions seeing significant inventory growth included Ottawa with a 44.5% rise, Edmonton at 17.7%, Halifax at 8.1%, and Vancouver at 7.3%.
The real estate firm attributes the surge in supply to sellers’ expectations that demand will increase by the fourth quarter of 2024 and early 2025.
“High interest rates and stricter lending policies have made it difficult for first-time buyers to enter the market in recent years, despite paying record-high rent prices that mimic mortgage payments,” said Christopher Alexander, President of Re/Max Canada, in a press release.
“This current lull is the calm before the storm. By spring 2025, we anticipate that pent-up demand will drive stronger market activity, especially for entry-level condos, as first-time buyers and investors compete for affordable options.”
Price Trends in Major Markets
The report notes that the GTA was the only region where average condo prices fell year-over-year, with a 1.9% decrease to $732,648. Meanwhile, Calgary led price growth, with a 15% rise, bringing the average condo price to $347,203. The Greater Vancouver region remains the most expensive market for condos, with prices averaging $823,550, a 1.9% increase from 2023.
Edmonton recorded the lowest average condo price at $200,951, but also posted the second-highest price growth, with a 4% year-over-year increase. Interestingly, Edmonton saw a 36.7% increase in condo sales during the first eight months of 2024, despite most other regions experiencing declines in sales volume.
Market Activity and Buyer Hesitation
While inventory is growing, the report noted that buyers remain cautious, with condo sales declining by over 8% in the GTA, Greater Vancouver, and Fraser Valley. According to Re/Max, even though the Bank of Canada has cut interest rates twice this year, these reductions have done little to boost buyer confidence due to the high rate increases seen previously.
However, the report suggests that if further rate cuts are implemented, combined with policy changes to improve affordability, market activity could pick up, especially among end users who are looking to buy for personal use rather than investment.
Challenges in the Toronto Market
The Toronto condo market remains under pressure, with oversupply and weaker demand keeping prices down. The report points out that inventory levels have been increasing due to a combination of resale units and new condo completions. A significant number of new condo units are planned for the GTA in the coming years, with 20,000 units expected in 2025, 30,000 in 2026, and 40,000 in 2027.
“With a six-month supply of condos currently available in the GTA, the market is shifting into a buyer’s market,” the report explained. “Prices are hovering near their lowest points, and with the Bank of Canada’s interest rates expected to decline further, this fall could present a unique opportunity for first-time buyers.”
The report concludes by noting that as absorption rates increase and inventory levels diminish, demand will start to rise, likely leading to upward pressure on condo prices in the near future.
