There have been concerns that there are too many condominium buildings going up in the Greater Toronto Area (GTA), which potentially could lead to a collapse in condo prices.
This risk seemed to be confirmed by a 699-unit increase in vacant condo units to 1,644 units in the GTA in January, the highest level of vacant condo units in the region since April 1993.
However, this rise is not alarming because the supply of new condo units is declining, says Stéfane Marion, chief economist and strategist with National Bank of Canada in Montreal. In January, there were 48,000 units that were vacant or under construction, down from 55,331 units in December 2014 and also down from the previous high of 58,030 units in February 2014.
What happened in January was that an unusually high 10,218 condo units were completed in the GTA. As 92% of these units were sold or rented, this pulled down the number of units that will be available in the future.
In contrast, the remaining 8% of completed but vacant units resulted in a large monthly increase in vacant units.
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