Canadian condo sales falling amid concerns over interest rate hikes

Canada's real estate market is taking another hit as condominium sales are showing signs of slowing across most of the nation's major markets, according to a new report from Re/Max.

The report released on Tuesday showed condo sales falling in all but two of Canada's seven largest markets, as strong sales between May and August of this year were still no match for 2022's year-to-date sales.

Condo sales in Calgary, Alta., grew to 22 per cent in the first eight months of 2023, while in Edmonton, Alta., they grew three per cent year-over-year.

Sales transactions are down 17 per cent in Vancouver, B.C., and Ottawa, Ont., while in Toronto sales are down 12.8 per cent, 10.3 per cent in Fraser, B.C., and 3.6 per cent in Halifax, N.S.

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In Vancouver, only 10,100 apartments were sold between January and August 2023, compared to the same period in 2022 when 12,159 apartments were sold. During the same period in Toronto, Canada's largest condo market, apartment sales were down to 18,264 compared to last year's 20,948.

Various factors impacted the range in sales including higher borrowing costs seen in B.C. cities and Ottawa, as well as interprovincial migration to Alberta where buyers were enticed by the lower cost of living.

Despite the Bank of Canada's decision to maintain its key interest rate at five per cent in September, previous months of consistent hikes have left many Canadians on edge for continued increases and overall affordability, Re/Max president Christopher Alexander said in a news release.

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"The cost of living is out of control in larger centres and even the most affordable housing now carries a pretty substantial sticker price," Alexander said.

"Earnings have not kept pace with housing costs and inflation continues to stretch household budgets thin. Taxation is also an issue, with the City of Toronto gearing up to introduce an even more punitive Municipal Land Transfer Tax in January of 2024. Is it any wonder why buyers are heading west to Calgary and Edmonton or east to more affordable markets such as Halifax?" he continued.