Due to the increase in housing prices in Toronto and Vancouver, more construction has taken place in these two luxurious cities creating more home building opportunities. According to the Canada Mortgage and Housing Corp, they said that the statistics for housing has increased since September by 17 percent from the previous month and has gone up to an annualized pace of 218,333 units in the month of June. This situation of soaring prices has caused builders to run away from other cities like Montreal as they venture into Vancouver and Toronto. In the month of June, there has been a 37 percent of new ongoing construction in both cities.
Robert Kavcic who is a senior economist working for BMO Capital Markets stated that “Residential construction activity remains a highly regional story in Canada, as it should be given how widely economic conditions differ below the surface right now.” An expected amount of 189,500 units is forecasted by Economists based on the average 16 feedbacks gotten from the Bloomberg survey. Amid the increasing prices on houses which have proven to be uncontrollable, there has been a tight watch on the real estate market in both Vancouver and Toronto, most especially emphasis on whether or not ‘demand is overinflated.’ The realtors have shifted the blame to supply constraints, meaning they are the reason behind the price gains.
To determine the end result of the construction going on, an economist at the Toronto-Dominion Bank, Diana Petramala, commented in a research note saying “The supply response has been delayed, but today’s housing starts report is a good sign that it may be coming.”
The numbers should give some hope to the industry. An increase of seven percent in home prices was recorded during the month of June. The Toronto Real Estate Board said the low supply period in the city was “of paramount importance.” The housing starts in Toronto was at an annualized 45,848 in the previous month (June), which has turned out to be the highest since March. Vancouver had an increase of 35,445 units in the same month, making it the highest pace to have been recorded over in a period of 16 years. Bob Dugan, the chief economist of CMHC’s has this to say in a statement; “Overall, June saw housing starts pick up the pace in Canada, bolstered by apartment construction in Ontario –- especially new condo construction in Toronto’s downtown core. However, elsewhere in the country, construction activity slowed as apartment construction eased in Quebec.”
Vancouver had an increase of 35,445 units in the same month, making it the highest to have been recorded in a period of 16 years. Bob Dugan, the chief economist of CMHC’s has this to say in a statement: “Overall, June saw housing starts pick up the pace in Canada, bolstered by apartment construction in Ontario –- especially new condo construction in Toronto’s downtown core. However, elsewhere in the country, construction activity slowed as apartment construction eased in Quebec.”