Demand for condominiums in Canada’s three largest urban centres, and most major cities across the country, is expected to outpace that of the single-family residential segment in the new year, as homebuyers who have been sitting on the sidelines begin to return to the market in search of more affordable housing options, amid higher interest rates and increased day-to-day living costs.
According to the 2023 Market Survey Forecast, Royal LePage anticipates that the median price of a condominium will increase 1.0% year-over-year to $568,933, while the median price of a single-family detached property is projected to decrease 2.0% to $781,256, during the same period. With the exception of Edmonton and Winnipeg, condominium prices are expected to outperform single-family detached home prices in all major markets next year.
Despite price declines in Canada’s most popular cities over the last year, buyers are expected to return to the market in 2023, many of whom will be looking for the more affordable properties. With a severe shortage of available inventory, the greater regions of Toronto and Vancouver are forecast to see condominium prices increase next year. Meanwhile, in the Greater Montreal Area, prices in this segment of the market are expected to dip slightly, although not as much as single-family homes.
Greater Toronto Area
“Lack of supply is still a huge challenge in southern Ontario,” said Karen Yolevski, chief operating officer, Royal LePage Real Estate Services Ltd. “I expect buyers who have been waiting for prices to level off will encounter increased competition when they re-enter the buying cycle, specifically in the more affordable condo segment, although not at the levels seen in 2021 and early 2022.”
Greater Montreal Area
“While the price correction is now mostly behind us, we’re forecasting that prices will continue to decrease slightly in the first half of the year, before rebounding modestly over the following six months, once interest rates have stabilized,” said Dominic St-Pierre, vice president and general manager, Royal LePage Quebec. “At that point, it is expected that many buyers who have adopted a wait-and-see attitude will return to the market.”
Greater Vancouver
“Although many buyers are still sitting on the sidelines, activity levels are showing signs of a return to seasonal norms in Greater Vancouver. Attractive properties in sought-after neighbourhoods that are priced properly continue to sell quickly,” said Randy Ryalls, managing broker, Royal LePage Sterling Realty.
Ryalls expects that home prices in Vancouver will stabilize next year, led by stronger activity in the condominium and townhome segments.
For additional information on all nine of Canada’s major markets, read more here.
