According to the new report done by consultancy PricewaterhouseCoopers and the non-profit Urban Land Institute what is driving the real estate market today are homeowners who are choosing the convenience of city living rather than focusing on the living space that suburban areas provide; in other words those buyers who are purchasing the new condos you see rapidly going up all over the city.
This is mostly due to the changing demographics; young families rather take advantage of downtown living and the convenience it provides. Canadians are also more aware of the cost and time associate with lengthy commutes. Alongside of these factors there are also provincial land use regulations that protect green space thus limiting land to develop new construction causing a condominium boom in major cities.
The continuing urbanization trend has raised some questions like what will happen once the lifestyle of these young families and singles change; will they choose to move to suburbia or simply adapt to the smaller living spaces as other cities such as New York. The concern that we face with this rapid growing condo market is an oversupply of units and whether it is excessively weighted towards wealthy, foreign investors.
Due to the expected rise in interest rates next year from an ultimate low this year increases the probability of change in the demand of housing market. But according to the survey composed of 1,400 individuals within the real estate service firms, developers, private investors and commercial developers the consensus was that Canadian market can handle a rise in mortgage rates due to the much improved economic stability in Canada and the U.S. which will remain to appeal to foreign capital.
The report indicates that developers will continue to address the needs of downtown residents by building more mixed use properties with residential and commercial space available creating more retail, services, jobs, and etc. all in walkable convenient locations. The report also stated that GTA will hold the most possibility for retail growth while Calgary, Vancouver and Edmonton will see more residential growth in the year 2015.