The Canadian Condominium Industry

Paper Summary:

This paper explains that the condominium market is one aspect of the speculative real estate market that has contributed greatly to the bubble-like behavior of the recent housing boom. The author points out that the condominium component of the housing industry is particularly important to the mortgage loan industry and typifies the significant symbiosis that exists between the housing and the mortgage finance industry. The paper stresses that condominium developers may have a cost advantage in a significantly depressed market because single-family unit developers are unable to account for land costs across a greater number of housing units as condominium developers are able to do. The paper includes graphs.

Table of Contents:
Overview
Economics of Supply and Demand
The Price Impact on Homes
The Mortgage Loan Industry
Effect on Housing Market

From the Paper:

"Among the artificial forces that affect supply and demand, the first may be a private enterprise's mandate to lower the number of vacant, month-to-month temporary units by a fixed percentage point in order to control demographic development. This is not a market force but an operating decision to increase revenue on existing units on the part of a given company specializing in housing products; either single units or condominiums. To accomplish this objective a company needs to artificially manipulate equilibrium within the market."

Sample of Sources Used:

• Ahiakpor, James C. W. Classical Macroeconomics: Some Modern Variations and Distortions. New York: Routledge, 2003.
• Buckland, Jerry, and Thibault Martin. "Two-Tier Banking: The Rise of Fringe Banks in Winnipeg's Inner City." Canadian Journal of Urban Research 14.1 (2005): 158+.
• "Condos booming but many prefer homes; Poll examines likes and dislikes Lack of yard space a factor in Toronto :[ONT Edition]. " Toronto Star [Toronto, Ont.] 11 Nov. 2006, K13. BusinessDateline. ProQuest. <http://www.proquest.com/>
• "Diamante Development to build ultra-luxury condominium in Toronto's Upper Yorkville. " Canada NewsWire 8 November 2006 1. ProQuest Newsstand. ProQuest. <http://www.proquest.com/>
• "New Housing Price Index." Statistics Canada (online). 8 Nov. 2006< http://www.statcan.ca/Daily/English/ 051208/ d051208b.htm>.

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