“House prices are high relative to both income and rents,” the organization reiterated in its latest World Economic Outlook, released in early October. “The IMF staff estimates that real average house prices in Canada are about 10 percent higher than fundamental values, with most of the gap coming from the markets in Ontario and Quebec.”
One major market of concern is Toronto’s condo market, which continues to surpass all odds.
Still, recent stats point to a healthy rental market – meaning there is still a demand that will likely continue to drive investment.
The number of condos rented through MLS reached record highs in the second quarter of this year, with 7,132 units being rented. That marks a ten per cent jump year-over-year.
“Rental activity is heading towards a more sustainable pace as demand levels-out following extremely high rates of growth in previous quarters,” Shaun Hildebrand, Urbanation’s senior vice president said in a release Friday. “With the fundamentals such as immigration, population and employment growth in Toronto recently slowing while condo completions move higher, rents can be expected to stay flat over the next year, although remain supported by still low rates of vacancy.”
Echoing sentiments from earlier this year, the International Monetary Fund is uneasy about the current housing market in Canada, believing it to be overvalued.