Posthaste: Condo prices in the suburbs are cratering

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Canada's condo market has taken a beating recently, but nowhere more so than in the suburbs.
Prices in communities surrounding Toronto such as Halton Hills, Ont., have plummeted by more than 50 per cent from their peak, says a report by Moody's Analytics.
Brampton, Mississauga and Oakville have also suffered 'significantly' steeper losses than the City of Toronto itself.
White Rock, B.C. and West Vancouver have seen peak-to-trough declines of 30 to 40 per cent compared with the national condo price drop of about 8 per cent.
'Given the booming supply, proximity is commanding a premium, and periphery markets are giving back their pandemic gains,' said Brendan LaCerda, director of economic research at Moody's.
During COVID-19 lockdowns, prices soared in regions surrounding Toronto and Vancouver, as remote work prompted an exodus from downtown cores. In response, developers built more, and supply boomed, eroding the price premium on suburban condos, said the report.
Since Canada's housing market peaked in mid-2022, the performance of multifamily housing markets and that of single-family homes has diverged sharply, said Moody's.
Both markets plunged when mortgage rates began to rise, but after bottoming out a year later, the single-family home market has made steady gains, while the multi-family market has suffered further declines.
By the first quarter of 2025, condo sales in the Toronto area had dropped 75 per cent from their peak in mid-2022, said Canada Mortgage and Housing Corporation in a separate report.
Months of inventory for pre-construction condominiums here hit a record high, 14 times higher than in 2022.
Moody's said the outlook in the short run depends on how well the condo market can absorb the new inventory. Pre-construction sales were driven by low interest rates, but as these are reset at a higher rate, distressed borrowers could be forced to sell, putting more pressure on prices.
'With a wave of new supply poised to hit the market and interest rates remaining elevated, the downward trend in condo prices is likely to endure,' said LaCerda.
to get Posthaste delivered straight to your inbox.The almighty American consumer seems to be taking a breather, and tariff price hikes may be to blame.
After shrinking in May, U.S. real personal spending rose just 0.1 per cent in June, said Sal Guatieri, a senior economist with BMO Capital Markets.
'Services spending was soft, but the real standout was a 0.5 per cent drop in durables even after a previous large decline,' he said.
Durable goods have been hit by new duties, and as BMO's chart shows, prices have climbed 3.2 per cent annualized over the past five months, the biggest increase in nearly three years.
Household appliances spiked 16 per cent, computing equipment 14 per cent and home furnishings 5 per cent.
'Further price increases are expected, which could depress consumption in the second half of the year,' said Guatieri.
The voting period for unionized Air Canada flight attendants on a strike mandate ends today.
Greater Vancouver realtors are expected to release July housing data today, followed by the Toronto Regional Real Estate Board Wednesday.
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