A sustained elevation in residential prices has slowed down new townhouse sales in Canada’s top markets, according to the latest market analysis by the Altus Group.
This has become especially evident in markets where significant numbers of buyers are moving away from single-detached properties due to these assets’ pricing.
In the Greater Toronto Area, the number of new townhouse units sold has steadily declined over the past 2 years, from 5,329 in the first half of 2016 to just 885 during the same time frame in 2018. The proportion of newly sold homes that townhouses represented has also experienced a downward slope, declining to just 7% in the first half of 2018.
Vancouver townhouse activity has seen a similar slowdown, from 2,604 in the first 2 quarters of 2016 to 1,867 during the first half of this year. However, the market share of new townhouses has swelled from 19% in the first half of 2016 to 23% this year.
However, while the townhouse share of total starts has also increased, it appears to be headed for a plateau “as condominium apartments take on a larger role,” the Altus report stated.
In terms of demographics, new townhouses attracted a healthy combination of consumers, with a majority citing the inflamed costs in the single-detached segment as their main motivation.
Single young professionals are the most likely to purchase this housing type, although middle-age households with children (still the largest buying demographic in Canadian housing) have also gravitated towards townhouses.