Wednesday, 09 May 2012 21:25
Canuck developer: global trend buoys condo market
Written by Vernon Clement Jones
Canadians worried today's condo market will suffer the same crippling correction as in the '90s are biting their nails for nothing, said one leading developer, pointing to a seismic shift in consumer preferences.
“There is an interest and demand to live downtown and there was not that interest and demand to live downtown in 1989, 1990," Brad Lamb, head of the eponymous Lamb Development Corp, said Tuesday. “People still wanted to live in the suburbs.”
He was answering concerns about price growth in Toronto's condo market, which keeps going and going and going. At the same time, condo developers across Canada have actually stepped up their collective building spree.
April, in fact, saw a 14% increase in housing starts, driven by condominium construction, according to a CMHC’report released this week.
Economists have called that growth unsustainable, suggesting developers, and , indeed, some lenders, are priming the market for a 15% to 20% price correction.
Some banks have already moved away from lending to condo investors, representing as much as 40% of buyers in that vertical market.
Still, Lamb argues April’s numbers may represent a blip in the pace of construction, which nonetheless remains in line with consumer demand.
Homebuyers continue to flock to Toronto’s downtown core, looking to be at the centre of the action. Developers in others of Canada’s urban centres make the same case for why cranes continue to pop up across their respective skylines.
It’s a whole demographic shift in how people want to live now,” said Lamb, whose firm completed 450 sales last year. "It’s a worldwide trend now: people are living in cities.”