Much has been made of the Greater Toronto Area’s hot condo market, but sales were down 21% last year compared with 2017.
According to an Altus Group report, there were 48,500 unit sales last in 2018—substantially lower nearly 62,000 units sold a year earlier.
“The drop was primarily due to an adjustment in the Greater Toronto Area following a record year in 2017,” read the report. “Vancouver sales continued to moderate, albeit slightly, from the record set in 2016. The shining star last year was Montreal, where new condo apartment sales climbed for the third year in a row, to the highest level yet recorded by Altus Group.”
Seniors contemplate additional properties
The Altus Report says that older Canadians are seriously contemplating buying more properties. Four percent of Canadian homeowners at least 50 years old intend to buy another residential property next year.
“However, not all of them will buy a home—in 2018, roughly 2% of homeowners aged 50+ did buy a home, compared to 4% last winter with plans to buy.”
Those aged 50 and older who plan to buy a home, price remains their preponderant concern.
“About four in 10 are looking for a lower-priced home, be it resale or new,” said the report. “Some of these would be looking to downsize to lesser square footage in their local market, but others may plan to move to lower-priced, smaller markets. About three in 10 intended buyers aged 50+ are thinking about buying additional properties—i.e. vacation properties or rental investment properties.”
20% of buyers are Self-employed
The self-employed are notorious for having difficulty qualifying for mortgages and often end up in the alternative and private lender channels. Given that they comprise a significant cohort among homebuyers, this spells good news for subprime lenders.
“According to data from Altus Group’s FIRM Survey, about one in five recent home buyers overall were self-employed, with a higher proportion in the new home market. Self-employed buyers were somewhat more likely to have used private lenders (although the proportion is still relatively small) and had higher mortgages rates on average (with about one-quarter having a rate of 4% or more compared to less than one-tenth of buyers who were not self-employed.”