Condo gains push Canadian housing starts to a 4-month high

Dated: 02/17/2020

Views: 82

Canadian builders began 2020 with a strong rebound in housing starts that is good news for the nation’s increasingly tight real estate markets.

Work began on an annualized 213,224 units in January, up 8.8 per cent from a revised 195,892 in the prior month, Canada Mortgage and Housing Corp. said Monday in a statement. Economists in a Bloomberg survey had anticipated starts would be 205,000.

It’s the highest level of new construction in four months, after a slowdown at the end of 2019, and suggests builders may be responding to the recovery in demand in some of the nation’s largest housing markets. At the same time demand is increasing, a shrinking supply of available homes is driving up prices in several cities.

“With recent data pointing to further tightening in demand-supply conditions in many resale markets, a solid pace of home building to start the year will be welcomed,” Josh Nye, a senior economist at RBC Economics, said in a note to investors.

Embedded Image

In a separate report Monday, Statistics Canada said building permits rose 7.4 per cent in December, more than double the 2.8 per cent median forecast from economists. The increase is consistent with the housing starts data for January, and included a 47 per cent surge in Toronto intentions, the most 2014.

A combination of steady population growth, low unemployment and cheap borrowing costs have brought buyers back into markets that had been lackluster for much of 2018 and early 2019. Combined with shrinking supply, the rising number of buyers has driven bids for homes higher in places like Toronto, where benchmark prices are up 9 per cent over the past year.

Starts in Toronto were up 51 per cent from December, on a seasonally adjusted basis, CMHC said. Montreal, another market that has been doing well, saw starts rise 53 per cent.

Overall, Canada recorded a 13.6 per cent jump in multiple urban starts during the month, while single-detached starts fell 0.9 per cent.

Blog author image

Steven Axford

Steve Axford grew up in Victoria, BC and has always been active in his community. Steve is a Victoria Cougars Hockey Team alumni as well as a Victoria Shamrocks (intermediate) alumni. During his time....

Latest Blog Posts

Rent is due: worries about being able to pay

Property managers, landlords and building owners are bracing for bad news today, as the COVID-19 pandemic’s effect on the economy is expected once again to disrupt the property rental market

Read More

As sales decline, some home and condo prices increase

Despite a global pandemic that has decimated economies around the world, Victoria’s real estate market continued to chug along in April, albeit at a much slower pace.Selling prices in some

Read More

Victoria Spring market far from the usual as real estate continues to react to pandemic

A total of 287 properties sold in the Victoria Real Estate Board region this April, 58.8 per cent fewer than the 696 properties sold in April 2019 and 52.8 per cent fewer than the previous month of

Read More

Real estate sales expected to slide, with fewer sales than usual through summer: BCREA

B.C.’s housing market will take an initial a dive due to the coronavirus-driven recession, but it is expected to recover next year, says the industry’s association.Sales throughout B.C.

Read More