Condominiums and Apartments Market - Growth, Trends, COVID-19 Impact, and Forecast (2023-2028)

The size of the Condominiums and Apartments Market is valued at about USD 1,220.51 billion in the current year and is anticipated to register a CAGR of over 3% during the forecast period. The growing demand for affordable housing has created a demand for condominiums and apartments. Furthermore, the market is driven by residential housing sales picking up because of the new buyers entering the market.

Key Highlights

• Over the last two years, the condo market has experienced ups and downs as demand and prices for single-family homes have skyrocketed. Some buyers wanted more space, while others didn't care about being close to their workplace. While condo demand recovered from an early pandemic slump, prices never reached the level of single-family home costs. However, the overall slowdown is affecting both types of homes. According to the Northwest Multiple Listing Service, pending condo sales in Seattle were down 25% in June 2022 and 44% on the Eastside compared to the same period in 2021. At the end of June, the number of condos still on the market was up 3% in Seattle and 71% on the Eastside.
• Discounts are more common for move-in-ready buildings, according to Dean Jones, owner of Realogics Sotheby's International Realty, while developers whose towers are still under construction can try to wait for more buyer demand in future years. Sales at Koda, a new tower in the Chinatown International District where about half of the condos have sold, are lagging initial projections as the market slows. Deals aren't just struck by luxury condo developers. Individual condo sellers are lowering their asking prices, offering to pay a year's worth of HOA fees, or paying to lower a buyer's interest rate. According to Erik Mehr, whose firm is leading sales at the building, the developer is now offering 5%-10% price cuts on condos. Prices for studios start around USD 350,000, but the highest-end units are around USD 1 million.
• Rentals for HDB flats and private apartments in Singapore increased last month, with analysts predicting that the trend will continue. According to flash figures released on Wednesday by property portals 99. co and SRX, HDB rents increased by 2.4% in August 2022, compared to 1.5% in July 2022, with rents rising across all flat types in both mature and non-mature estates. Condominium rents increased by 3.2% in August 2022, compared to 1.7% in July 2022, with central Singapore experiencing the fastest growth at 3.7%. Meanwhile, condo rental volume increased by 0.4% last month to an estimated 4,524 units, reversing a drop that began in August 2022.
• Pent-up demand is expected to fuel increased activity in the Asia-Pacific real estate market in 2022-2023, with the luxury end of the market performing particularly well. While an overall improvement is expected, industry sources have identified several individual country markets that are likely to benefit the most from this improved sentiment. According to Colliers' latest Asia-Pacific Market Snapshot, demand for larger and higher-quality spaces is expected to be particularly strong in Singapore, with homeowners willing to pay a premium to secure such properties. A growing influx of high-liquidity overseas buyers is expected to boost the market even further. Greener, more environmentally friendly spaces are also expected to be built throughout the region.

Condominiums & Apartments Market Trends

Increasing Demand for Condominiums in Several Regions Driving the Market

According to projections from the Foundation for Community Association Research, the number of new condominium communities and homeowners' associations increased by 5,000 in 2022. Community associations, also known as homeowners' associations, condominiums, and housing cooperatives, house 74.1 million Americans accounted for 25-27% of the housing stock in the United States. According to the Foundation's estimates, there were approximately 358,000 community associations in the United States by 2021. Homeowners associations accounted for 58%-63% of the total, with condominium communities accounting for 35%-40% and cooperatives accounting for 2%-4%. According to estimates, the value of homes in community associations is close to USD 11 trillion.

Prices for new condominium apartments in Vancouver increased the most (+4.2%) in Q1 2022, driven up by declining inventories and continued demand for this type of dwelling. Condominium apartments, as opposed to single-family homes, have remained a relatively affordable option for first-time home buyers as well as investors looking to enter a hot rental market. According to Rentals.ca, Vancouver had the highest year-over-year average rent increase (+29.9%) in March. Higher rents have attracted investors to this city, reducing the supply of available units and contributing to rise in prices for these new condominium apartments.

In 2021, approximately 60% of new condominium units sold in the Tokyo metropolitan area were priced at or above USD 0.37 million. This is the conclusion of the most recent Recruit survey of condominium buyers, which has been conducted annually since 2001. The price ranges of units purchased are broken down as follows: 22% were between USD 0.37 million and USD 0.44 million, while 36% were USD 0.44 million or higher. Meanwhile, the average floor space of condominium units in 2021 was 66.0 square meters, the smallest since the survey began. The proportion of units less than 70 square metres was 48%, indicating the ongoing trend toward smaller living spaces.

Increasing Apartment Construction to Meet Housing Demand in Asia-Pacific

The pandemic has hurt the entire hospitality industry because the demand tap was effectively turned off. However, the depth of that pain may have been less pronounced in serviced apartments, with the recovery appearing to be outpacing that of hotels. Using the United Kingdom as a comparison, London serviced apartment RevPAR (revenue per available room) was 17.9% lower in December 2021 than in December 2019. The level of RevPAR decline was also less pronounced during the pandemic. Because of strong domestic demand, the regional UK market has performed better than London in terms of serviced apartments and hotels. However, as of December 2021, serviced apartments outperform hotels in terms of RevPAR.

According to the Turkish Statistics Authority, the number of apartments sold to foreigners in June 2022 reached 8,630, an increase of 81.8% over sales in the same month last year 2021, and the highest monthly sales compared to the previous three years. During June 2022, foreign sales accounted for 5.7% of the total general sales of apartments in Turkey. Sales of apartments to foreigners in Turkey during the first six months of this year totaled 35,383 apartments, representing a 72.7% increase over sales to foreigners during the same period last year. Regarding the classification of foreign nationalities based on their purchases of apartments in Turkey, the Russians ranked first with 1,887 apartment purchases in June 2022, with the most foreign nationalities buying apartments in Turkey.

Condominiums & Apartments Market Competitor Analysis

The Condominiums and Apartments Market is fragmented with the presence of a large number of local and regional players, as well as global players. The major players include Clark Group, Suffolk Construction, AECOM, Lendlease, and Summit Contracting Group, among many others. The companies are striving to provide condos in different varieties as per the requirements of the region, likewise, Latin America is demanding luxurious spaces while Asia-Pacific needs affordable housing. Despite investment from global players, local and regional players have got hold of a good share of the local market in their region.

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