The main point of this article is to inform the public about the cooling of the building boom in the GTA. This article analyzes and compares how the growing demand of single-family and new home markets are outweighing demand for condos significantly. A primary factor that has contributed to the sharp increase in housing starts is due to the delay of construction over the past few years. For years, builders and citizens have shown more interest in condo markets, the primary reason being that starting prices are more resilient than single-family homes. Condo development is accountable for 80% of all construction in the GTA. The overbuilding of houses and condos as well as, delays in construction has contributed to a tighter, more competitive
…show more content…
New home construction has surpassed the peak of levels in 2012, hovering near 2008/2009 recessionary levels (chart 1).
Housing markets are overbuilt and delays in project completions have contributed to tighter markets. Completion rates have been quicker than ever and is recorded to be three times their historical average in January and February of this year (chart …show more content…
Condo development now accounts for 80% of all construction in the GTA. The consequences affiliated to overbuilding are that condo prices will decrease by 3-4% over the next two years. People will find it more difficult to move from a condo to a single-family home and will cause the prices of single-family homes to rise.
Question: Do you agree that overbuilding condos in the GTA will cause the prices of condos to decrease, consequently allowing single-family homes to increase?
High rates of delayed construction have started in 2011 and 2012, and are expected to complete in 2015 and 2016. Approximately 40% condo units have already been purchased in the pre-construction phase and is predicted that the they will be held for investments by being rented out.
Question: Do you think that there should be a restriction on this because people are supposedly using condos as an investment instead of a place of residence?
TD Economics does not predict that condo markets will crash, but instead cool off. New construction is likely to result in periods of overbuilding and under building. Low interest rates prevalent in Toronto is a huge risk as it encourages
New home construction has surpassed the peak of levels in 2012, hovering near 2008/2009 recessionary levels (chart 1).
Housing markets are overbuilt and delays in project completions have contributed to tighter markets. Completion rates have been quicker than ever and is recorded to be three times their historical average in January and February of this year (chart …show more content…
Condo development now accounts for 80% of all construction in the GTA. The consequences affiliated to overbuilding are that condo prices will decrease by 3-4% over the next two years. People will find it more difficult to move from a condo to a single-family home and will cause the prices of single-family homes to rise.
Question: Do you agree that overbuilding condos in the GTA will cause the prices of condos to decrease, consequently allowing single-family homes to increase?
High rates of delayed construction have started in 2011 and 2012, and are expected to complete in 2015 and 2016. Approximately 40% condo units have already been purchased in the pre-construction phase and is predicted that the they will be held for investments by being rented out.
Question: Do you think that there should be a restriction on this because people are supposedly using condos as an investment instead of a place of residence?
TD Economics does not predict that condo markets will crash, but instead cool off. New construction is likely to result in periods of overbuilding and under building. Low interest rates prevalent in Toronto is a huge risk as it encourages