Condo demand mixed in big cities: BMO

Plans to buy a condo in the next five years among homeowners in Toronto and Calgary are on the rise, while buyers in Montreal and Vancouver are reconsidering the prospects of high-rise living, according to a BMO Bank of Montreal report.

Read: Toronto a tale of two condo markets

The report, conducted by Pollara, examined intentions to buy property in the next five years among homeowners in four of Canada’s major city centres, and revealed:

• Toronto: One-third (31%) of prospective buyers in Toronto plan to purchase a condo in the next five years, up 11 points from the fall.
• Vancouver: Intent to buy condos in Vancouver has dipped by five points, from 33% in the fall to 28%.
• Calgary: Prospects for condos among home buyers in Calgary has risen 8 points from the fall (33% versus 25%), while intent to buy a traditional home has dropped from 71% in the fall to 58%.
• Montreal: 24% of buyers in Montreal will be opting for condo living, down 3 points. However, intent to buy a house has risen sharply by 16 points, from 46% in the fall to 62%.

Frances Hinojosa, mortgage expert, BMO Bank of Montreal, noted that the convenient condo lifestyle offers benefits for a number of demographics, from first-time buyers to baby boomers.

Read: Housing affordability not a problem for most families

“For many first-time buyers, particularly in high-priced markets like Toronto and Vancouver, condos represent an affordable stepping stone into the housing market,” said Hinojosa. “On the other side of the spectrum, many in the baby boomer demographic may be looking to downsize from the family home — leading some to consider the condo market as well.”

Hinojosa added that the report shows prospective buyers of the age 50 and over are more likely to be planning to purchase a condo than those under the age of 50 (30% versus 17%).

“Condos remain an affordable alternative to the pricey detached market in some major cities,” added Sal Guatieri, senior economist, BMO Capital Markets. “For example, a typical Toronto condo today requires just 22% of a median family’s income to service; Vancouver condos — while more expensive — are still affordable at 28% of income.

“Downsizing baby boomers and upsizing — from the parents’ basement — echo boomers are likely to support the condo market in the coming decade,” said Guatieri.

Read: Fewer Canadians will buy homes: RBC

Staff

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