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June 2012: Condo Market Looks Precarious

Posted June 28th, 2012 under market updates.

The Bank of Canada has chosen not to raise interest rates after all, so they remain at their historic lows.

This may have helped to level out sales, since buyers would presumably not be rushing to beat the announced rate increase any more. Sales are down 12% over last month. However, this is typical of the summer slowdown, so it's impossible to say whether interest rates played a role or not.

Meanwhile, new listings have kept pace with last month, which has allowed us to build stock. Prices remain strong, but are no longer rising—with the exception of condos, where there are warning signs.

Builders have begun offering bigger incentives to buyers and higher commissions to agents. This is a sign they are trying to lock people in purchases now. These same signs were present in 1989/90 before the crash, but thankfully the signs are limited to the condo market this time.

Want to know more about the state of the market? Just ask me, I'll be happy to help.