Notable News of the Week: July 27, 2012
Each week, Ratehub.ca brings you the Notable News. We compile and summarize the most relevant and up-to-date news from the mortgage and housing industry so you can stay informed. This week, RBC reports that there is no condo bubble in Toronto, Canderel looks to build the tallest residential skyscraper in Canada, and Scarborough and Etobicoke are experiencing significant rises in house prices, making them the newest housing market hot-spots.
No condo bubble in Toronto: RBC report – The Star
Toronto’s condo market is booming, but that doesn’t mean it’s in a bubble. A new report by the Royal Bank of Canada shows condo construction hit a record 44,100 condo and apartment units under construction in May 2012. An additional 6,200 other semi-detached and row houses are in development.
Some fear that large numbers of newly built condos are sitting empty; however, Robert Hogue, senior economist at RBC says this information is “not supported by the statistics” and that “newly [built] condos are most likely to continue to find occupants in the period ahead.” According to the RBC report, “The historic condominium apartment boom in the Toronto-area market is not necessarily a sign of excess or of a bubble. While it may not be due to a bubble bursting, nonetheless, we expect that buyer demand for condos will cool going forward.”
On the other hand, David Madani, economist at Capital Economics predicts future price drops of as much as 25 per cent in Canada’s real estate market, the hardest hit cities being Toronto and Vancouver.
Canderel looks to build tallest residential skyscraper in Canada – The Star
Cutting edge real estate and condo design corporation Canderel has created some of Toronto’s hottest neighbourhoods. Their next project is Aura at College Park, being built at Yonge St. and Gerrard St. W. Once completed in 2014, it will hold the title of the tallest residential skyscraper in Canada with a whopping 78 storeys! Aura is also slated to become home to Canada’s second largest penthouse, selling for $18.3 M with 11,370 square feet of living space and providing a scenic view of the city.
Newest housing market hot spots are in Scarborough and Etobicoke – Toronto Life
Home prices continue to soar in Toronto, according to a new report by the Municipal Property Assessment Corporation (MPAC). This corporation, which conducts property assessments in Ontario, reports that housing prices rose 23 per cent since 2008. The neighbourhoods northwest and southwest of Scarborough, Etobicoke’s Mimico and areas north of Bloor Street near the subway experienced the largest price hikes. Bungalow prices in these areas jumped 50 per cent, in some cases reaching over $1M—a welcome price for sellers, but first time home buyers may have to look elsewhere.
Vancouver stays strong in cooling commercial market – Financial Post
In terms of the market for office and industrial space, Metro Vancouver is leading the way with strong performances in the second quarter of 2012 compared to other cities across Canada. The strength of Metro Vancouver’s office market derives largely from the downtown core where an office vacancy rate of 3.6 per cent is well below the national average of 6.1 per cent. In addition, suburban markets experienced more lease space availability with a vacancy rate of 12.7 per cent. With an overall increase of 40 basis points to 8 per cent in the second quarter, the Metro Vancouver market is hoping to continue this strong trend.
On a larger scale, a cooling trend was reported across the country by CBRE Limited’s National Office and Industrial Trends Second Quarter 2012 summary. Ross Moore, director of research for CBRE Canada says, “Canada is great in the sense that we are doing better than pretty much every country in world, but we are still below normal trend growth. The Bank of Canada has lowered 2012-2013 growth estimates, and we are pretty much stuck at two per cent. We’re in the middle of a pretty sluggish period of growth, but it’s still growth.”