Looking At The Condominium Growth And How Much Longer We Can Expect It To Last

The condo boom is a part of the Canadian real estate sector that has reinforced the rehabilitation of the national economy. The amount of apartments on the market is still growing and some people are starting to say that it isn’t going to go on. Why are they in such demand and isn’t there a point where the amount available outways demand? For the past few years, Canada has met a condo boom — practically all of its major cities have been following this direction, and condos have been springing up like wildfire for the past few years across the country.

Condominiums don’t require as much space as houses, so building a condo is both economical and space-saving. Urbanization generates the demand for many new homes in quite a short time, so why not build condos that are more cost efficient than a new house? Home-buyers, retiring baby boomers, and people emigrating are the most common condo buyers.

At this moment in time, the city is considering four applications, or even more, for Calgary condos builds according to the Calgary Herald. “It says to me people are pretty optimistic about the future, any of these plans are probably a two-year build, everyone’s looking two, three years out,” says David Watson, the city’s general manager of planning, development, and assessment.

Watching the economic guides we find that they are really positive about the balance of supply and demand of condo units. “Condo sales bounced back this month June 2011, and we now have less than four months of supply on the market. Stronger condo sales, combined with a decline in inventory, will lend more balance to this market in the months to come,” says Sano Stante, president of the Calgary Real Estate Board.

Supply is growing and some analysts are fearful that there is going to be a glut of supply. But not everything is negative, analyses state that immigration, the shortage of land and demographics should put a stop to any collapse that may be seen.

Phil Soper of Royal LePage has looked at the city planners’ forecasts for demand against projects underway and firmly believes that there are not enough condo projects in the big cities.

Interest rates though, seem to be on lots of people’s mind with little way of telling what is going to happen with them. A prediction of a cumulative 25 per cent drop in the national average price during the next 3 years, will be seen when income and population are looked at, according to David Madani from Capital Economics. “There’s a really large disconnect between house prices and the fundamentals. We don’t think that this is sustainable,” David said.