High-rise construction strong due to ‘unprecedented’ level of condo sales
By Lucas on Sep 11, 2017
The Canada Mortgage and Housing Corporation (CMHC) released its monthly housing starts report for August 2017, announcing that starts in Canada trended higher last month.
Nationally, the trend increased to 219,447 units, compared to 217,339 in July. The trend is a six month moving average of seasonally adjusted annual rates (SAAR).
“Canada’s trend in housing starts was above the 200,000 unit mark for the eighth consecutive month,” says Bob Dugan, CMHC’s chief economist. “Demand for new homes remains strong, consistent with consumer confidence which reached its highest level in ten years.”
Focusing on Toronto specifically, the strong demand for condo units over the last few years has made for a high rate of housing starts. With the “unprecedented” amount of preconstruction condo sales in Toronto, CMHC expects housing starts to trend high well into the near future.
Overall in Toronto, housing starts trended 8% higher in August compared to July. CMHC says that the low-rise sector was steady, but year-over-year the number of single detached homes under construction fell 25% from 1,183 to 887.
While Toronto is seeing less singles and more condo projects and rental buildings, Kingston is seeing more of both! The numbers are way smaller compared to Toronto, but there is a sign of change in Kingston.
Builders started 60 homes last month in Kingston, which is a lot when you look back at August 2016 when only 38 homes were started. There were 64% more singles and 46% more of other types of housing starting construction.
CMHC attributes the strong demand for apartment (condo and rental) units in Kingston to the growing number of students and the aging population. For multiple starts, this is the second highest month Kingston has had in more than 10 years!
The standalone monthly SAAR was 223,232 units, slightly higher than the 221,974 in July. The SAAR of urban starts went up 0.8% to 207,524 units, with multiple starts going up 2.7% to 145,618 and single detached starts falling 3.2% to 61,906. Rural starts are estimated at 15,708 units.
With the recent announcement that there were only 137 new low-rise sales in July (and not much was released in August) in the Greater Toronto Area (GTA), it seems like single detached starts will be low for the foreseeable future. But, the GTA is expected to see a surge in new inventory this fall with many builders planning new releases and openings.
We’re excited to see what the typically busy fall season brings!
