A Wake Up Call For Investors and Home Buyers

Posted by Roman Bodnarchuk on Wed, Dec 05, 2012 @ 10:12 AM

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The best time to buy is when condo showrooms are quiet, not hopping. A developer with a huge lineup is not going to give a better price than one with zero people. That is just basic supply-and-demand.

It is a common sense argument, but one with current numbers to support it. Here are some good reasons why demand will continue to outstrip supply:

  • The construction industry works its hardest to build only 13,000 condo units per year, while a record 28,000 of them were sold in 2011.

  • It can take over five years to complete a development from start to finish, allowing for a maximum 13,000 units per year to be added.

  • From 2009 to 2011, the condo rental vacancy rate fell from 3.5% to 1.4%, because only 5000 condo rental units are completed and available in any given year.

  • Yet 10,000 new renter households join the market, leaving a shortfall of 5000 rental units.

  • This leads to a severe shortage of rental accommodations.

Condo sales continue to represent the biggest share of new home sales. The market may be cooling, but only in a manner that presents an opportunity to investors with great timing.


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Topics: market, condo, condo sales, construction industry, construction, rental


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