Vancouver/Toronto comparison: Condo Market

In previous posts we compared the Toronto and Vancouver housing markets by analyzing the detached sector. In this article we will continue this comparison by reviewing the recent price histories of each city’s condo market.

Just as we saw from detached homes, both cities’ condo markets experienced price gains that matched closely with the overall health of their housing markets.  Our review started by examining prices from five years ago, which showed healthy price increases through 2014 and into 2015.  Vancouver was the first city to have its market start to accelerate in the second half of 2015 continuing into 2016. This was followed by Toronto with its major gains from 2016 to 2017.  In each case, the condo market acted in step with the broader housing sector of the city.

Condo benchmark
(Source: TREB, REBGV, Six Housing Sense)

In comparing the two cities, it is after the initial periods of major gains where we start to see some differences between the condo markets. This is better reflected in the chart below, which shows the year over year percentage price changes. From the graph lines we can see that Vancouver’s annual percentage gains momentarily peaked in July 2016 at 27% before slowing slightly with annual increases between 15-20%. These rates lasted for nearly a year before accelerating again, setting a new year over year best in January 2018 of 30%.  Since that time, Vancouver has again been softening trending below 15% price increases.

Condo % price
(Source: TREB, REBGV, Six Housing Sense)

For Toronto, the data shows a more prolonged period of initial success. The condo market reached new highs achieving a 29% increase in April 2017, only to do slightly better in July with 30% gains. The market then began to slow its growth with annual returns dropping into the low 20s before continuing to slide to just above 10% this past July.

If you have read our previous posts on the detached market, you may recall we noticed a nine month time shift between the two markets. Essentially, in the detached housing sector we saw that if Toronto’s price movements were shifted forward nine months there was a near perfect overlap of the two markets. For comparison sake, we will do the same for the condo sector. (Vancouver’s line shows Jan. 2015 to the present, while Toronto’s is Oct. 2015 to the present).

Condo time shift
(Source: TREB, REBGV, Six Housing Sense)

From the time shift we once again seen clear similarities, though not perfect like-for-like movements that the detached market offered. As already discussed, the two markets began to act slightly differently following their first significant price gains. Where Vancouver immediately slowed down before rising again, Toronto’s condo sector was able to maintain its gains a little longer before beginning to slow. As the Toronto market now enters the period where Vancouver accelerated all over again, it will be interesting to see if Toronto will follow Vancouver’s lead or not.

In our next post we will continue to study the condo market comparison by examining the sales to new listings ratios of the two cities.

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