New condo sales have ramped up in Ontario’s less populated regions, including Niagara and Simcoe, a sign that demand for housing in suburban and semi-rural areas is growing stronger.
Since the COVID-19 pandemic began, homebuyers have sought larger properties for their home offices and entertainment. The competition for more space has created a frenzy in the housing market, with home prices in semi-rural regions increasing as much as 30 percent throughout the health crisis.
However, the latest data shows that the sales of pre-built apartments also increased sharply. These are properties that are not yet ground-breaking or under construction, and the sale of these projects is often seen as a bet on the future as buyers wait several years for their apartments to be built.
In the Wellington and Niagara regions in Southern Ontario, preconstruction condo sales more than doubled from 2019 to 2020, according to Altus Group, a commercial real estate data firm. In the Simcoe and Waterloo areas, new condo sales rose 39 percent and 22 percent, respectively, according to Altus.
At the same time, sales of pre-built apartments have declined in most major urban centers. In Canada’s largest real estate market, the Toronto area, sales of new apartments have fallen 22% year on year.
In Edmonton, new condo sales decreased by 54 percent, and in Calgary by 11 percent. In Hamilton, a commuter city, sales fell 73 percent. In Montreal, they dropped 29 percent when comparing the first three quarters of 2020 with the same period in 2019, according to Altus. Vancouver was the only major city to see an increase, up 8 percent year over year.
Although suburban apartment sales were stronger than in the urban center last year, new apartment projects in the City of Toronto are gaining popularity again as rents and resale prices begin to rise.
According to research firm Urbanation, the average monthly apartment rent in the Toronto area rose to $ 2,033 in February but is still well below pre-pandemic levels.
Also, the amount of apartment resale in the city is increasing and the average selling price of an apartment has increased by 8% in February after falling steadily in the last few months of 2020.
“Investor interest has risen again,” said Urbanation president Shaun Hildebrand, adding that developers have been rolling out projects this year at prices on par with pre-pandemic levels.
“Investors are expecting a sharp rise in prices as the apartment market starts to catch up with the secluded home market,” and they don’t have any attractive alternatives to their investment money.
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