The Bank of Nova Scotia wants you to know that condo prices are going to drop in Toronto—well, kind of. Sort of. Maybe. The bank released a report that the Canadian condominium market is showing signs of “oversupply,” but no harbingers of a crash. According to the Toronto Star, Adrienne Warren, a senior economist at the bank, told a real estate forum yesterday that “the current stock of unsold new homes is higher than average,” and that there’s “a situation of rising multi-housing unit inventory which has been trending up.” Though it sounds a bit dire, the translation is simply: there are slightly more condos out there than there are people who want to buy them.
In Toronto, condo development has been booming, with 286 projects on the market at the end of 2010—a number the Star says is likely the highest of any city in North America. (Of course, one look out of your condo’s window and you already know this.) For some analysts, that means that prices could fall in the near future, albeit only slightly. For others, it suggests that the glut of condos could derail the larger domestic recovery, as stated by a more downbeat report from Capital Economics also released on Tuesday.
Despite the difference in opinion, it seems as though most analysts are predicting a future of level prices, but no major catastrophes. Phil Soper, president and CEO of Royal LePage Real Estate Services, told the Star that the ups and downs in the economy haven’t had a major impact on the Canadian market. “Despite all the doom and gloom we hear coming out of the U.S., attitudes toward home ownership remain buoyant in Canada.”