According to a recent report from Re/Max Canada, condo inventory is increasing significantly across major Canadian markets, as sellers get ahead of anticipated demand from eager buyers. The report, which covers condominium activity from January to August of this year, highlights substantial inventory growth in several regions.

Inventory Growth by Region

The Fraser Valley in British Columbia took the lead with a staggering 58.7% increase in condo inventory compared to the previous year. It was closely followed by the Greater Toronto Area (GTA) at 52.8% and Calgary at 52.4%. Other notable areas experiencing inventory growth include Ottawa (44.5%), Edmonton (17.7%), Halifax (8.1%), and Vancouver (7.3%).

Reasons Behind the Spike in Inventory

Re/Max attributes this rise in supply to a growing belief among sellers that demand will increase in the latter part of 2023 and into early 2025. Christopher Alexander, the president of Re/Max Canada, noted that many potential first-time buyers have been sidelined due to high interest rates and strict lending standards, even as rental costs remain exceedingly high—often matching the costs of mortgages. He stated, “The current lull is the calm before the storm. As we approach spring 2025, we expect pent-up demand to drive a surge in market activity, particularly for entry-level properties.”

Condo Price Trends

Interestingly, the GTA was the sole region to witness a year-over-year decline in average condo prices, which fell by 1.9% to $732,648. In contrast, Calgary experienced a remarkable price growth of 15%, with average condos now costing $347,203. The Greater Vancouver Region maintains its status as the priciest market in Canada, boasting an average condo price of $823,550, a slight increase of 1.9% from 2023. At the other end of the spectrum, Edmonton offers the most affordable condos with an average price of $200,951, yet it saw a commendable price increase of 4% year-over-year.

Sales Activity Overview

Despite overall sales declines in most regions, Edmonton has bucked the trend with a whopping 36.7% increase in condo sales compared to last year. On the flip side, the GTA, Greater Vancouver, and Fraser Valley all marked declines exceeding 8%.

Cautious Buyer Sentiment

“Inventory levels are rising, which is drawing more viewers to listings; however, buyers are still cautious nationwide,” the report asserts. The Bank of Canada’s recent interest rate cuts did not significantly stimulate buyer engagement, but experts anticipate that further cuts and adjusted policies to enhance affordability might encourage more activity, especially amongst first-time buyers.

Market Outlook for the Greater Toronto Area

The situation in Toronto is particularly pronounced, with oversupply and weak demand creating a sluggish market. The report warns that the GTA may lag behind other regions in recovering from these challenging conditions. With an expected influx of 20,000 new condo units in 2025, escalating to 30,000 in 2026 and 40,000 in 2027, inventory levels are expected to remain high.

Current Inventory Levels

Presently, the GTA has roughly six months' worth of condo inventory available for sale, a factor that heavily favors buyers. “With prices approaching their lowest and the Bank of Canada's rates trending lower, the fall market could present an ideal opportunity for first-time buyers. As absorption rates improve, the current oversupply will decrease, leading to a rise in demand that could subsequently push average prices upwards once more,” the report concludes.

Conclusion

As we move forward into the potential recovery phase, those in the real estate market—whether buyers, sellers, or investors—should stay keenly aware of these evolving dynamics.