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NEW CONDOMINIUMS: The demand for condominiums is linked to lower prices, but also reflects a growing number of people downsizing and living alone.
Judging by demographic trends, sales and construction activity, the future of housing is leaning sharply towards condominiums and townhomes. “Condominium apartments and townhomes now represent one in two residential sales in Metro Vancouver – their universal appeal attracting entry-level purchasers to affluent, experienced buyers,” notes a study released last month by Re/Max. The demand for condominiums is linked, of course, to lower prices, but it also reflects a growing number of people downsizing and living alone. Today, 9.9 per cent of Canadians live alone, including more than one million seniors. Single people also account for 27 per cent of the population. As the baby boomers age, 38 per cent of long-term marriages end in divorce, and those that stay married often downsize to a condominium from a house when they become empty nesters. Virtually all of Canada’s housing demand growth will come from this aged 25 to 34, reflecting the maturing of the baby echo generation. “These buyers, many of them singles or young professional couples, should support continuing moderate demand for condos, particularly in urban centres close to employment opportunities,” said a recent study by Scotiabank. There is also high demand for condominiums from both local and off-shore investors, according to local Realtors.
Long term mortgage rates rise
TD Canada Trust and the Royal Bank of Canada have increased some of their fixed-term mortgage rates by as much as one-quarter of a percentage point, effective Wednesday. At both banks, five-year mortgages, one of the most popular among Canadian homeowners, will rise by 0.25 of a percentage point to 5.44 per cent. Rates on three- and four-year mortgages are also increasing by a quarter of a percentage point, while one-and two-year rates will go up by 0.15 of a percentage point. Rates for mortgages that have six, seven, and 10-year terms will be unchanged. While Canada‘s economy remains relatively strong and the Bank of Canada has been hiking interest rates, concerns over the U.S. recovery continue to simmer.
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