Women the new 'wildcard' in the condo market
By Garry Marr
Megan Vickell is a new brand of condominium owner that people predicting a market crash may have forgotten to factor in.
She’s young, single and ready to buy her first home. And, more importantly, she’s female — part of a growing demographic that just might be creating a new paradigm in the housing sector.
A report from Canada Mortgage and Housing Corp. shows women are a growing powerhouse in the Canadian condominium market. Among people who live alone, women made up 65% of owner occupants in 2011.
It’s not just one thing about condos that is pushing Ms. Vickell to look at a high-rise. The public relations manager of eBay Canada says she’s close to putting in an offer this week on a 650 square foot unit.
“When I was looking I was grumbling because a lot of the maintenance fees were so high but then I was walking down the street after a big snowfall, and all these people were snowed in, I thought ‘for a single female, I’m willing to pay those fees’,” she says. “I don’t even know where to start with half that stuff around the house.”
There are other perks of condominium living that attracts her to the market, including the 24-hour seven-day a week concierge service. “It’s everything you need in one place. There is someone to take my packages when I’m not there, I’ve got a gym. It’s really just all about convenient living,” says Ms. Vickell.
She sees the condominium as a stepping stone to a house. “I think of it as a five-year plan,” she says.
The condominium market shows few signs of slowing down. CMHC said this month November new construction reached 194,014 on a seasonally adjusted annualized basis, well above the number we need based on demographics. Multiples, which includes high-rise condominium units, made up 111,036 of the figure.
Growth in owner-occupied condominiums has exploded over the last three decades, according to the CMHC report. In 1981, there were 171,000 owner-occupied condo units but that figure grew to 1,154,000 by 2011.
Benjamin Tal, deputy chief economist with CIBC World Markets, agrees that women may be the unknown wildcard in determining whether the condominium market can continue its explosive growth.
“One point we’ve made when we’ve said this market is crazy is people need to look at demographics in a different way,” says Mr. Tal. “People buy a house now and don’t marry. Sure there’s the divorce rate being high but many young people in their 30s are not married but busy with careers and buying a home because they have the means. This is a new wave of demand that hasn’t been there before.”
What hasn’t really taken hold, based on the survey, is families considering condominiums. The largest chunk of condo owners are one person households at 42%, followed by couples without children at 28%.
Mr. Tal’s prediction is that in time we will see more families moving into condominiums, it’s just too early to see it any statistics.
“This will be the thing of the future. We are maybe five, six or 10 years from that,” he says.
The condo phenomenon remains mostly a story for Canada’s two most expensive markets with 51% of all new condo starts in 2012 happening in Toronto and Vancouver. Investors continue to drive both markets with 23% of condo apartment units in Toronto rented in 2012 and 26% in Vancouver.
Overall, there seems to be little question that the condominium is going to become a major part of the housing stock in Canada. CMHC noted that in 1981 only 3.3% of homeowners lived in a condo. That percentage grew to 12.6% in 2011.