The best time to buy is when condo showrooms are quiet, not hopping. A developer with a huge lineup is not going to give a better price than one with zero people. That is just basic supply-and-demand.
It is a common sense argument, but one with current numbers to support it. Here are some good reasons why demand will continue to outstrip supply:
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The construction industry works its hardest to build only 13,000 condo units per year, while a record 28,000 of them were sold in 2011.
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It can take over five years to complete a development from start to finish, allowing for a maximum 13,000 units per year to be added.
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From 2009 to 2011, the condo rental vacancy rate fell from 3.5% to 1.4%, because only 5000 condo rental units are completed and available in any given year.
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Yet 10,000 new renter households join the market, leaving a shortfall of 5000 rental units.
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This leads to a severe shortage of rental accommodations.
Condo sales continue to represent the biggest share of new home sales. The market may be cooling, but only in a manner that presents an opportunity to investors with great timing.
