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The State of Canada's Housing Construction in 2023: Insights and Analysis
October 11, 2023 | Posted by: Dallas Martin
So, what's the real deal with Canada's housing construction in 2023?
Let's go ahead and get straight to it. According to the Canada Mortgage and Housing Corporation, housing construction in Canada's six biggest metropolitan areas saw a tiny increase of 1.0% in the first half of 2023 compared to last year. Wow, talk about a slow climb.
Now, where was this slight increase coming from? You guessed it - apartment starts! These had a healthy jump of 15% (48,029 units) for the period. But hold your horses because all other categories weren't so lucky. Row house starts took a 17% dip, semis fell by 22%, and the gold standard of housing - detached single-family homes - saw a drop of 25%. Ouch!
And who were the star players in this game? Toronto and Vancouver, of course! They accounted for nearly two-thirds of the starts, with increases of 32% and 49%, respectively. But not everyone was having a party. Poor Montreal was hit with a 58% overall decline. Can we get a moment of silence for Montreal?
In an earlier report, the CMHC stated that Canada needs to build an additional 3.5 million housing units by 2030, surpassing the predicted 2.3 million, to meet the expected demand. No pressure, right?
But here's the kicker: high interest rates, reduced credit access, and skyrocketing construction and labour costs have put homebuilders between a rock and a hard place. This has resulted in fewer project starts and longer completion times. Talk about a tough gig!
The CMHC anticipates that these economic challenges will further dent building starts through the second half of the year, pushing starts back to last year's levels. On top of that, the agency expects a rising demand for rental housing, driven by record high levels of immigration and the ever-increasing barriers to home ownership, including those pesky high prices and interest rates. So, who's up for a game of Monopoly?
Here's where we come in! We're a mortgage company that knows a thing or two about navigating these choppy real estate waters. If you have questions or concerns or want to chat about your options, give us a shout. We're here to help you make sense of it all. Because let's face it, who doesn't need a friendly guide in this real estate jungle?
