Canada's Condominium Magazine

Dwellling starts were up for 3rd quarter 2017 year-over-year in Ontario but down for October: lower future inventory may pressure prices up

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…]

 

Dwelling (building or housing) starts in Canada for October 2017 as growth year-over-year from 2016. Data from CMHC.

 

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.

CMHC dwelling starts data by province October 2017 compared to October 2016.

 

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.

 

October 2017 dwelling starts data for provinces and by metro area. CMHC data and table.

 

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.”>>]

 

Seasonally adjusted building starts in Ontario 2017 over 2016. CMHC data.
Via-Bloor-Tridel
Auberge on the Park-Tridel
Bianca-Tridel-Annex

SHARE WITH US

Subscribe to condo.ca

@ 2017 condo.ca  |  Designed by Persona Corp