I can’t imagine a more suitable quote to sum up recent media coverage of the Canadian condo market. Story after story perpetuates the negative message that the market can’t be sustained.
Frankly, these pieces are grossly distorting the facts, and misleading the public in the process.
To help set the record straight, I wanted to share the gist of the CMHC’s 2013 annual report. Spoiler alert: it’s good news.
The condo market has certainly grown quickly. Between 1981 and 2011, the growth rate for owner-occupied condos in Canada outstripped that of other homes by over nine times. By 2011, we had a total of 1,615,000 occupied condos, with most new construction occurring in urban centres.
While past numbers are solid, how can we be sure the trend will hold?
Let’s consider who’s buying condos. Quick answer: all kinds of people. To distill the numbers, in 2011, 29 per cent of condo owners were seniors, while nearly one-fifth were under 35. Close to half of condo owner-occupiers lived alone, while over a quarter were couples without children.
Are these demographic groups likely to grow? Fascinatingly, CMHC found that people living alone – let’s call them solo dwellers – are expected to become the most common household type by the 2020s. In another growing trend, couples with children account for fewer households than ever. For many seniors, young singles and urban couples, condos’ affordability, security and worry-free lifestyle makes them a natural choice. (At the same time, in large urban centres, more growing families are turning to condo living, à la Manhattan.)
But what about all those empty high-rise suites we keep hearing about? Let’s add some perspective. According to a December report released by BMO Capital Markets senior economist Sal Guatieri, “The number of newly built, unoccupied condos is not high when normalized for population growth.”
CMHC points out that current condo construction rates are in keeping with rising numbers of one-member households, immigration and a general shift towards more compact dwellings. In other words, condos aren’t going anywhere.
Where condominiums are concerned, Ottawa is still in its infancy. With such tremendous potential for growth, purchasing a condo in this city is still among the best investments around.
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