Previous to this, the bank’s economics section on September 30 predicted that condo prices could “weaken in larger markets next year”.
Another thing is happening as well with the condo market in Canada.
In its latest housing report, RBC Economics noted that the real-estate market is awashed with condo supply.
According to economist Robert Hogue, "condo investors are looking to sell”.
“As rents soften and vacancies rise, condo listings are spiking in Toronto, Montreal and Vancouver—albeit from low levels,” Hogue reported on Thursday (October 29).
In the City of Toronto, condo listings in September 2020 increased 133.9 percent compared to supply in the same month last year.
For the rest of the Greater Toronto area, condo listings last month posted year-over-year growth of 81.5 percent.
In the island of Montreal, listings rose 41.4 percent in September compared to the same month in 2019.
However, for the rest of the Greater Montreal area, listings declined 32.8 percent year-over-year.
In Greater Vancouver, listings of condo properties rose 20.9 percent in September 2020 compared to the same month last year.
In contrast, listings for detached homes in all Toronto, Montreal, and Vancouver metropolitan regions decreased year-over-year in September.
“New, stricter regulations in Toronto are adding to the impulse to sell – at a time when new condo completions are bringing more units to the Toronto and Vancouver markets,” Hogue noted in his October 29 report.
Hogue’s report covered in broad strokes how the COVID-19 pandemic is affecting the Canadian housing market.
“Rural and suburban areas that once lagged desirable city addresses are now roaring hot as homebuyers wearied by lockdowns seek bigger yards and larger living spaces,” Hogue wrote.
Meanwhile, “Tight downtown condo markets that previously commanded expensive rents are now thick with supply.”
Hogue also stated that “rent is now declining in Toronto, Montreal and Vancouver, especially in higher density, downtown locations”.
“Underlying the shift,” according to the bank economist is a “surge in rental supply as the short-term rental business dries up and new purpose-built rental and condo units are completed”.
As well, “Big-city living has lost some of its luster with social distancing measures severely restricting cultural life and socializing opportunities.”
“Meantime, affordability issues are driving many Canadians further afield into smaller towns and cottage country, where larger living spaces are available,” Hogue wrote.