“It doesn’t reflect a slowdown in condo demand,” he says. “It reflects a slowdown in project openings in 2013, because there is usually a 15 to 18 months lag between sales and starts.
“2014 was a big year for condo sales and it brought a lot of those 2013 projects’ sales figures up high. Now it’s just a matter of time before they begin to break ground.”
The TD report also warned that the greatest near-term risk facing the market is that the growing excess supply of condos in the city, pointing to CMHC figures that showed completions were three times their historical average in January and February 2015.
“Those completions that CMHC are reporting that show a huge spike actually took place last year,” said la Fleur. “If there was going to be an impact we would have felt it already.”
The TD report also said that the supply of condos on the market is expected to push condo prices down by a moderate three to four per cent over the next two years, but both la Fleur and Hildebrand both disagree.
Hildebrand added: “They are misdirected in waiting for a price decline to come out of these increases in condo completions, at least in the near term, because almost all of the new supply ends up in the rental market.”