Canada's Housing Bubble

Jan 30, 2010 Nicole McIsaac National Post

Fourth-quarter condominium sales jumped 36% over third-quarter results, says a report from Urbanation Inc., which tracks condo sales in the Toronto Metropolitan Area.

"I was really shocked. We were expecting a fairly good fourth quarter because the third had done so well, but it was certainly higher than expected," said Ben Myers, a spokesman for Urbanations.

Compared with third-quarter sales of 4,617, there were 6,295 new units sold in the fourth quarter, a record number. It was a huge jump from 917 units sold in the first quarter of 2009.

Meanwhile, new house sales increased from 10,492 last quarter to 11,559, also the best fourth-quarter sales on record.

Shaun Hildebrand, a Canada Mortgage and Housing Corp. analyst, attributed the surge to low interest rates. "Buyers realized that interest rates were too attractive to pass up," he said.

Mr. Myers said the average amount of condo sales for 2009 matched 2008 closely.

"Last year was more evenly distributed, but this year it was all at the end of the year. It's the same number of buyers, they just waited until the end of the year," Mr. Myers said.

At the same time, the MLS listings for resale homes dropped to 21,445 from 26,205, due to a very competitive market that saw houses selling for 103% of the asking price.

Mr. Myers said Toronto statutory costs such as land-transfer taxes, green-roof legislation and free TTC passes could dampen the market.