THE housing market in Toronto has bottomed out and is waiting to rebound when conditions become favourable, says International Hung Hsing Property Agency president Benjamin Ng. Mr Ng told the South China Morning Post's Property Post seminar at the weekend that prices in Toronto would remain stable. International Hung Hsing is the Hong Kong representative for Canada's largest real estate consultancy, Royal LePage. Mr Ng said the office market across Canada had softened, but prices would begin to climb as the economy in eastern Canada picked up steam once again. With this in mind, Mr Ng said Asian investment would continue to be strong in the next few years. Thanks to a small spurt in economic growth last year, Mr Ng said residential sales in Toronto were up by one per cent. He said the Canadian real estate market was only now recovering from the hardship of the late '80 and early '90s when overall property prices slumped badly in most parts of Canada. 'In Toronto last year, the market made a good start thanks to low interests rates, the improving economy and a number of government incentive schemes,' he said. While the market softened a bit during the rest of the year, residential property prices in both Toronto and Vancouver managed to edge up slightly. Thanks to Asian investment, particularly from Hong Kong, residential prices in Vancouver had been quite a bit higher than those in Toronto for the past five years. Mr Ng said Vancouver had always been the first choice for Asian immigrants because of its proximity to the Pacific rim and its moderate climate. As well as buying single detached homes, Asian investors had been buying condominiums in both Vancouver and Toronto where prices had fallen due to an oversupply in the downtown areas. Mr Ng said prices in Vancouver had dropped by about 15 per cent in the downtown area because of this oversupply problem. According to royal LePage figures, the average price of a house in Canada was C$157,000 (about HK$879,000), while the price of a house in Vancouver at C$295,000 was considerably more expensive than a home in Toronto which cost C$205,000. Thanks to the fastest growth among all of the G7 countries, there was considerable demand for commercial property with absorption in 1994 doubling 1993 figures, according to Mr Ng. He said the industrial vacancy rate was at a record low of 3.8 per cent. It was expected that the vacancy rate would dip another percentage point. Mr Ng said investment in retail property was up sharply last year. These were among the most sought-after properties in the Canadian market, he said. Large retailers and free standing superstores continued with their expansion due to increased consumer spending, he said. Vancouver continued to be the most expensive office market in Canada with an average gross rent of C$27 per square foot. Calgary was the most affordable Canadian city in which to rent office space, with vacancies in Toronto at 17.5 per cent still considered high. Because of the high vacancy rate, there has been a growing trend to renovate some of these downtown office buildings into condominiums. Overall, Mr Ng said that the office vacancy rate should decline slowly, well into 1995. 'However, plagued by weak net effective rentals and high vacancy rates, office properties will draw the least investor interest,' he said. He said the residential sector in Vancouver would continue to attract the most investor interest. The strongest demand would be in the C$350,000 to C$450,000 range for a single detached home.