The Royal Bank of Canada published a report this week titled “Booming Toronto condo market does not imply a bubble” which offered an upbeat outlook for Toronto’s condo market.
The report suggested that we might be seeing a two-tiered market emerging in Toronto where single family houses perform much better than condominiums. Our regular readers may recall that back in May I wrote about the diverging trends we are seeing between condos and houses. At that time I showed that the market for houses was still very competitive and deep in seller’s market territory while the market for condos was approaching a buyer’s market.
The report did find one considerable risk for Toronto’s condo market. From the report:
The biggest risk that we see for the coming years is a possible mismatch between the types of condo units bought by investors and the types ultimately demanded for occupancy, which could lead to oversupply in certain condo sub-segments.
I discussed this same issue on CBC’s Metro Morning a couple of months ago and thought it would be a good opportunity to expand on this idea.