RBC: No Condo Bubble In Toronto

It’s interesting how different banks, economists and analysts that are privy to the same data can come up with such diverging conclusions.

TD has maintained for a while now that there is a correction forthcoming.  Earlier this year, BMO flip-flopped on their view of the Toronto condo market to fall more inline with TD’s finding.

Next up: RBC.  Does being the country’s largest bank and biggest mortgage lender have an impact on the way they report on the real estate market?  Will they change their tune down the road?

From the report:

Booming Toronto condo market does not imply  a bubble

The army of cranes redefining the Toronto skyline—Toronto reportedly
counts the most high-rise real estate projects under construction in North
America—is said to be evidence of a housing bubble at play in Canada’s
biggest urban area. Record-high sales of new condominium apartment last
year raised concerns all the way to the top level policymakers in Canada.
In this report, we find that while it is true that condo sales and construction
are booming, such observations are less worrisome when considered
within in the broader housing context in the area…

We find that concerns about the actions of investors and/or speculators may
be somewhat overblown or, at least, premature…

Conclusion: no bubble but still some risks. The historic condominium apartment boom in the Toronto-area market is not necessarily a sign of excess or of a bubble.

You can read the entire report here.

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