Canada's Condominium Magazine
A dip in building starts for October in Ontario — on a year-over-year basis — may escascerbate short future inventories, putting upwards pressure on housing prices and rent. This may be especially pronounced given the announcement by Prime Minister Trudeau that Canada will welcome 340,000 new immigrants annually to the year 2020. [See our news story “Canada to increase immigration to 340,000 per year…]
Although adjusted 3rd quarter building starts in Ontario were up 2017 over 2016, October numbers are down:
3rd Quarter 2017 85,858 dwelling starts (adjusted annual number) versus 73,968 in 2016.
October 2017 Ontario starts total 5,162 versus 7,320 in 2016, or down 29%.
Condominium and multi-dwelling starts total 3,136 in October 2017 versus 4,650, or down 33%.
Toronto area — which has the highest need for inventory — down to 2,438 total in October 2017 versus 4,204 in 2016, or down 42%.
For the year as a whole, from January to October to date, housing starts for Ontario are up 3%, at 61,959 in 2017 versus 60,297 in 2016 for the same period.
Although Canada’s building starts overall ae up 32% for multi dwelling and 16% overall, with Ontario down this could result in lower available inventory. This is especially critical now, with the announcement of increased immigration targets for Canada — the majority of which are expected to settle in Toronto and Ontario.
Inventory issues may drive prices
Although dwelling starts does not directly correlate with future inventory, it is a strong indicator. Prior to the announcement of increased immigration targets by the Canadian government, analysts already projected an extreme shortfall of rentals and inventory for housing purchase. [See our previous story “Demographics and low inventory put pressure on Toronto’s real estate prices to increase: Toronto’s population to hit 7.1 million by 2019.”>>]