Dana Senagama, a senior market analyst with the CMHC, said condominiums will continue to lead new builds but developers are not speculatively breaking ground.
Past sales suggests condos are still in demand and CMHC data continues to indicate first-time buyers are increasingly buying more affordable condos: of the properties purchased by first-time buyers during the first half of the year, 78 per cent were priced below $500,000. The average price of a single-detached home in the city, meanwhile, is expected to rise to $870,000 in 2015.
In addition to first-time buyers, condos are becoming an increasingly popular choice among the baby boomer generation – those looking to downsize, but who want to remain close to their families in the city.
Similarly, immigration to the province, and largely to the city of Toronto, will continue to fill the condos continuing to be built.
Further, the condo market is also creating affordable rental opportunities for those in the core. About 25 per cent of condos purchased and rented out by mom-and-pop investors.
The condo market won’t collapse just yet, according the CMHC economists, pointing to high prices in the single-detached market that continue to push buyers toward high-rise living quarters.