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The Toronto condo market appears to be overheating and could soon be flooded with excess supply, says a new report from Bank of America Merrill Lynch Global Research.

The report is a rare warning in a condo market that most analysts say will continue to be supported by low rental vacancy rates and strong investor demand.

The market for condominiums in Canada’s biggest city could undergo a significant correction and stagnant construction over the next several years, economists Ryan Bohren and Sheryl King say in the report.

“We think investors are underestimating the wall of inventory about to come on the market in the next 12-24 months, which could dampen price appreciation and investor returns,” the authors said, adding Toronto could follow the path set by a recent overbuild in Kelowna, B.C.

They say multi-unit-dwelling construction across the country has surged back to record peaks. Toronto in particular has seen the strongest condo boom in more than a decade, with record numbers of units under construction. They noted that anecdotal evidence suggests up to 60% of preconstruction sales in the city are to investors.

The natural household formation rate for Toronto is estimated at 30,000 to 35,000 annually and apartments historically represent about 35% of that, or 12,000, the authors say.

“With apartment completions currently running at 18,000 and 37,000 condo units currently under construction, there is about 4.8 years’ worth of inventory in the pipeline,” Mr. Bohren and Ms. King say. That supply about to hit the market could put downward pressure on resale prices and rents.

View full article at Toronto’s condo boom about to bust: report

The 6.5 per cent annual gain is the smallest since January.

CREA stats show the average selling price in September fell by a seasonally-adjusted 0.4 per cent from the month before. Big month-over-month declines were recorded in Victoria (down 9.7 per cent), Saguenay (down 11.9 per cent), and Vancouver (down 3.7 per cent).

Market ‘healthy’

The figures suggest that Canada’s housing market remains in relatively good shape despite some economic headwinds, market watchers say.

“Canadian housing continues to look balanced and healthy, as low mortgage rates and a falling jobless rate are offsetting weaker consumer confidence and tighter mortgage rules,” writes Robert Kavcic, an economist at BMO Capital Markets. “We continue to expect sales and prices to cool in the year ahead, but the landing should be a soft one,” he says.

View full article at Average home price rises 6.5% to $352,600

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One Bloor condo building was a project that died with Lehman Brothers. It has not stayed dead for long.

Originally meant to stretch 80 stories over Toronto’s luxury shops of the Yonge and Bloor area, the condo building that would host a hotel and swath of stores (supported by the American financial powerhouse that had survived the Depression but not subprime mortgages) was not built in 2008. The next year, the developers mulled a scaled-back version. And then, nothing. For months, the lot stood empty, symbolic of a world that collapsed into recession.

And in 2011? The building is going up and the condos are being sold. Welcome to Canada.

View full artical at Despite the Downturn, Canada Prospers

Toronto’s condo boom is not slowing down anytime soon as the latest statistics show the city is building more high rises than anywhere else in North America.

The September 2011 data from German research company Emporis — the world’s largest source of information on multi-storey buildings — is included in a presentation to be discussed by the city’s economic development committee on Friday.

There are currently 132 highrise buildings under construction in Toronto, according to the figures. Mexico City ranks a distant second with 88 and New York City is in third with 86. The field drops off dramatically after that: fourth-ranking Chicago is building 17 highrises, while Miami rounds out the top five with 16.

Emporis defines a highrise building as between 35 and 100 metres high, or 12 to 40 floors. Buildings taller than that are considered skyscrapers.

Toronto already has the second-highest number of completed highrises and skyscrapers in North America, with 1,875 — just ahead of Mexico City and Chicago — according to Emporis. They all trail runaway leader New York City by more than 4,000, however.

PHOTO GALLERY: TORONTO’S DRAMATICALLY CHANGING SKYLINE SINCE 1919

Provincial and municipal land intensification policies, such as Ontario’s Greenbelt, have led to a shift away from low-rise development in the city, said Matthew Slutsky, founder and president of BuzzBuzzHome, which catalogues new residential projects in Canada.

“If you combine the construction with low-rises, the overall building is about average for Toronto,” he said, calling the growth of high-density development along transit lines a “fantastic” alternative to suburban sprawl.

“What we’re seeing is actually a tale of two housing markets, with low-rise in a substantial decline and highrise in steady increase,” George Carras, president of RealNet Canada Inc., wrote in the Star earlier this year.

View full article at Highrises? We’re tops on the continent

The country’s leading real estate broker said on Wednesday the average price of a home in Canada increased between 5.7 percent and 7.8 percent from July through September compared with the same period the previous year, a deceptively big gain because the third quarter of 2010 had been weak.

“The strength in Canada’s national housing market conceals signs of predictable softening in some regions,” said Phil Soper, president and chief executive of Royal LePage Real Estate Services.

“The third quarter saw a return to a normal seasonal business cycle as price appreciation slowed in many areas — with some average values even receding — after the busy spring trading season.”

Soper said a broader slowdown is expected as the economy struggles to gain traction as global growth falters. Even so, he said, “fears of a U.S.-style correction are completely unfounded.”

View full article at Home prices rose in quarter, slowdown seen

The boxes stack upon each other, and not necessarily in a fashion that one might initially imagine. The retail box protrudes from the podium box, the tower box appears to teeter and overhang the podium box, and the oversized rooftop amenity box actually does overhang the tower box.

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