本文发表在 rolia.net 枫下论坛Lower condo prices forecast
Economist sees 10 per cent drop Surplus of units in Toronto area
TONY WONG
BUSINESS REPORTER
A glut of condominiums in the Toronto area means that prices could fall by as much as 10 per cent over the next year, says a noted housing economist.
According to Frank Clayton of Toronto-based Clayton Research, the condominium market is at a cyclical peak and is due for an adjustment. "I don't think there will be a huge price adjustment, but we are due for one. I would say in the range of 5 to as much as 10 per cent."
About 13,000 condominiums are expected to be completed this year in addition to a similar amount completed last year in the Toronto area. Analysts have been urging caution in the condo market, but this is the first time a leading economist has estimated the impact the glut will have on the housing market.
Still, given the steep appreciation in the condominium market over the last several years, even a 10 per cent correction won't put much of a dent in the capital gains of an investor who purchased several years ago. But if you're in the market for a condominium now, it might be wise to hold off a little longer.
"Already you have a situation where too many projects are being marketed, so there will be many more units competing at the same time," says Clayton. "The history of real estate is of cycles, and we're in one right now."
To get traffic into showrooms, some Toronto condominium developers have started to offer inducements such as free TVs. . In the first quarter of the year, sales of condos were down 50 per cent compared with a year earlier.
Because many of these condos have been bought by investors — Clayton estimates up to 30 per cent of condos in the GTA are investor-owned — some of these units may be returned back to the market for sale as mortgage and vacancy rates rise. Already vacancy rates have risen in the Toronto area as more renters have become homeowners. As they vacate their apartments, the greater supply on the market causes rents to go down.
Another factor that may influence an investor to vacate the condo market is that because condominiums aren't appreciating in value as quickly as in past years, their capital gains are not as lucrative.
"The investor is going to have to decide whether he's wanting to get out of the market and when he does that he'll be competing with other investors thinking the same thing," says Clayton. "That will cause an adjustment, but it certainly won't be an adjustment like we had in the late '80s when condo prices went down 30 per cent or more."
While Clayton is bearish on the condo market, he is more bullish on the single-detached housing sector, which he says will continue to appreciate over the next year by at least the rate of inflation.更多精彩文章及讨论，请光临枫下论坛 rolia.net
Economist sees 10 per cent drop Surplus of units in Toronto area
TONY WONG
BUSINESS REPORTER
A glut of condominiums in the Toronto area means that prices could fall by as much as 10 per cent over the next year, says a noted housing economist.
According to Frank Clayton of Toronto-based Clayton Research, the condominium market is at a cyclical peak and is due for an adjustment. "I don't think there will be a huge price adjustment, but we are due for one. I would say in the range of 5 to as much as 10 per cent."
About 13,000 condominiums are expected to be completed this year in addition to a similar amount completed last year in the Toronto area. Analysts have been urging caution in the condo market, but this is the first time a leading economist has estimated the impact the glut will have on the housing market.
Still, given the steep appreciation in the condominium market over the last several years, even a 10 per cent correction won't put much of a dent in the capital gains of an investor who purchased several years ago. But if you're in the market for a condominium now, it might be wise to hold off a little longer.
"Already you have a situation where too many projects are being marketed, so there will be many more units competing at the same time," says Clayton. "The history of real estate is of cycles, and we're in one right now."
To get traffic into showrooms, some Toronto condominium developers have started to offer inducements such as free TVs. . In the first quarter of the year, sales of condos were down 50 per cent compared with a year earlier.
Because many of these condos have been bought by investors — Clayton estimates up to 30 per cent of condos in the GTA are investor-owned — some of these units may be returned back to the market for sale as mortgage and vacancy rates rise. Already vacancy rates have risen in the Toronto area as more renters have become homeowners. As they vacate their apartments, the greater supply on the market causes rents to go down.
Another factor that may influence an investor to vacate the condo market is that because condominiums aren't appreciating in value as quickly as in past years, their capital gains are not as lucrative.
"The investor is going to have to decide whether he's wanting to get out of the market and when he does that he'll be competing with other investors thinking the same thing," says Clayton. "That will cause an adjustment, but it certainly won't be an adjustment like we had in the late '80s when condo prices went down 30 per cent or more."
While Clayton is bearish on the condo market, he is more bullish on the single-detached housing sector, which he says will continue to appreciate over the next year by at least the rate of inflation.更多精彩文章及讨论，请光临枫下论坛 rolia.net