Canada's Condominium Magazine
Even Hollywood star Denzel Washington seemed surprised. Answering a reporter’s question as he did the red carpet at TIFF, Washington said with amazement, “There are condos everywhere!” Not quite everywhere, but maybe by the next time he comes to town. For the number of building permits issued in Canada in July, and specifically in Toronto, was at an all-time high. Across the country, the value of permits issued was up 11.8 per cent, to $9.2 billion. Of that, $5 billion was for residential buildings.
As Statistics Canada explains, multi-family dwellings—condos—accounted for most of the increase, which was mainly seen in Ontario and British Columbia. The value of building permits issued for condos was up 43.4 per cent in July. It was the fourth month in a row to show an increase. The number of new condo permits rose 35.2 per cent nationally. That equates to 14,050 new units. In Toronto, the increase in permits issued was 29.6 per cent, worth $1.6 billion.
According to Bloomberg, this big increase in building permits was a surprise, “confounding economists.” Bloomberg had previously done a survey of economists, who predicted a 5 per cent decline in permits. However, the continuing low interest rates, an improving economy, and a shortage of affordable single-family homes continues to drive the condo boom. In fact, the number of permits issued for single-family homes dropped slightly in July, down 0.6 per cent, though it was still up compared to a year ago.
Housing starts a different story
The unpredictability of the market from month to month, and the need to take the longer view, are underscored by the housing starts numbers for August released by Canada Mortgage and Housing Corporation (CMHC). The CMHC housing starts numbers came out on the same day as the Statistics Canada record-high numbers for July permits. New condominium construction in August was down 3.7 per cent compared to July, prompting CMHC economist Bob Dugan to reiterate that they expect to see a “declining trend” over the coming months as developers and builders try to avoid over-building.
However, the record number of building permits issued in July, which will not translate into actual housing starts for many months to come, could contradict CMHC’s prediction of a “declining trend.” What is more likely happening is that builders and developers are accurately timing their new housing starts to coincide with demand.