The apartment sector is typically the most affordable sector in the market. However, it did not receive the same boost in sales that the attached sector saw, likely due to competition coming from the new-home market. Competition from the new-home market and excess supply in the resale market have caused prices to decline for four consecutive years.
In 2020, easing prices and tighter rental-market conditions are expected to support modest sales growth in this sector. However, growth will be limited, as persistent competition from the new-home sector will continue to impact resale demand. At the same time, supply levels should continue to slowly ease, but this is not expected to be enough to support balanced conditions. Persistent oversupply is expected to continue to weigh on prices, but the pace of decline should ease, with an annual forecasted decline of nearly one per cent.
A LOOK BACK AT 2019:
- Fuelled by a stronger second half of the year, sales activity for apartment-style condominiums remained similar to 2018 figures with 2,672 sales. While sales did stabilize, they remain over 20 per cent lower than longer-term averages.
- Stable sales were met with reductions in new listings, causing declines in overall inventory levels and months of supply. The months of supply went from levels that averaged over seven months in 2018 to the over six months recorded in 2019.
- While the market remains generally oversupplied, these reductions helped support some stability in prices in some districts. However, prices still eased by two per cent in 2019 and remain 17 per cent below 2015 annual highs.
- While citywide sales remained stable, sales improved for product priced below $200,000. Reductions in oversupply were fuelled by supply adjustments, as new listings declined by nearly nine per cent and inventories declined by nearly six per cent.