Will rising prices force Canadian families into condos?

Low borrowing costs have brought buyers to the Canadian housing market, although slowing job growth and a jump in mortgage rates will likely cool the market.

It’s the first time the federal agency’s National Household Survey looked at condominiums in their entirety, including renters and owners, but the consensus in the industry seems to be that condo living is on the rise in urban centers.

Also clear is the push into condominiums is having an impact on Canadian home ownership levels which continue to rise, reaching 69% of households in 2011, the year the survey was based on. Only 60.3% of households owned in 1971.

“I think we are in the beginning of a shift,” says Benjamin Tal, deputy chief economist of CIBC World Markets. “I think in big cities like Toronto you will see more families living in the condominium market. That will be the next leg of the condo market, instead of small condos we will see larger condominiums.”

The condo trend is clearly focused in cities with 76.8% of condo dwellers in the 10 largest census metro areas. Toronto, Vancouver and Montreal accounted for 53.5% of all Canadian households in condominiums.

For now, it’s clear singles make up a major chunk of the condominium market with 45.5% of dwellers non-family households.

“I think we have an affordability issue and we will see more and more people living in condominiums,” said Mr. Tal. StatsCan noted the average annual household income for condominium owners was more than $33,000 below other types of home ownerships.