Limited resale listings pushing more buyers to the new home market
By Lucas on Aug 09, 2016
The Canada Mortgage and Housing Corporation (CMHC) released its housing starts figures for July 2016, announcing that starts are trending higher across Canada.
Last month, the trend measure was 201,936 units, compared to 197,847 in June. The trend is a six month moving average of seasonally adjusted annual rates (SAAR).
“July’s housing starts continued to pick up pace, as construction strengthened in BC and Ontario’s multi-unit segments,” says Aled ab Iorwerth, CMHC’s Deputy Chief Economist. “This reflects continued strong demand for lower-priced homes and low inventories of completed and unsold new units.”
The standalone monthly SAAR decreased from 218,326 units in June to 198,395. The SAAR of urban starts dropped 9.9% to 182,620 units. Multiple urban starts saw the largest decline, dropping 13.3% to 123,630, while single-detached starts remained somewhat steady, decreasing only 1.8% to 58,990.
Quebec, British Columbia, Ontario, and Atlantic Canada all saw a decrease in urban starts, but the Prairies saw an increase. Rural starts are estimated to be approximately 15,775 units.
Housing starts in Toronto
In the Toronto Census Metropolitan Area (CMA), housing starts trended higher at 43,201 units, compared to 40,930 in June, mostly due to strong condo construction and an increase in row starts.
The standalone monthly SAAR was 39,619 units, which is a decrease from 46,034 in June. There actually were fewer condo starts, but the jump in row starts and a slight increase in single-detached construction balanced it out.
“Fuelled by condo apartment construction, July saw the housing starts trend increase in Toronto,” says Dana Senagama, CMHC Principal Market Analyst for the GTA. “Single-detached home starts continued to trend strongly in July as a result of stronger sales in the new home market since the end of last year. Limited resale listings led buyers to purchase pre-construction units that are now underway.”
With new low-rise inventories also hitting record lows, it is unclear how long Toronto’s new home market can continue to support buyers that are dissatisfied with the lack of selection in the resale market.
The City of Toronto had the most starts last month, most of which were condo starts. Markham had the second most, also with mostly condo starts. Then Brampton came in third with a number of row and single starts.
