{"id":13902,"date":"2019-10-10T10:10:04","date_gmt":"2019-10-10T17:10:04","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=13902"},"modified":"2019-10-08T15:41:27","modified_gmt":"2019-10-08T22:41:27","slug":"canadian-homebuilding-is-still-not-enough","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2019\/10\/canadian-homebuilding-is-still-not-enough\/","title":{"rendered":"Canadian Homebuilding is Still Not Enough"},"content":{"rendered":"

Canadian homebuilding continued to beat expectations through the early fall, but when you take a good, hard look at the economic fundamentals driving the pace of activity, it shouldn\u2019t come as a surprise that builders are still having trouble satisfying buyer demand in some parts of the country.<\/p>\n

Housing starts \u2014 defined as when a builder begins construction on a single unit of housing \u2014 took a small dip in September but remained at a \u201crelentless level\u201d according to a BMO Economics research note published today.<\/p>\n

BMO economist Robert Kavcic says the data, which is released each month by the Canada Mortgage and Housing Corporation (CMHC), reflects \u201cstrong demographic demand, both from international inflows and new households created within Canada.\u201d<\/p>\n

That may sound a bit jargony, but what Kavcic is saying is Canadian homebuilders aren\u2019t overdoing it. There\u2019s genuine market demand for the homes being constructed and this historically elevated level of building is unlikely to lead to a glut in empty, unsold homes down the line.<\/p>\n

TD economist Rishi Sondhi, who also published a note on the housing starts data today, agrees that market fundamentals are justifying the high pace of homebuilding. He goes on to rhyme off a few more noteworthy drivers of housing demand, including low mortgage rates, healthy job markets and programs to promote more rental unit construction. On the topic of population growth, he adds that Canada\u2019s population growth rate rose at the fastest pace in almost 30 years in the third quarter of this year.<\/p>\n

All that is to say, there are many powerful forces at play that continue to keep homebuilders moving at this relentless pace.<\/p>\n

So homebuilding activity is strong from a historical perspective, but is it enough?<\/p>\n

Not everyone thinks so. At least not when it comes to the often prohibitively expensive Toronto market.<\/p>\n

Following the release of their own market data last week, Toronto Real Estate Board President Michael Collins and Chief Market Analyst Jason Mercer noted that the city\u2019s homebuyers would undoubtedly benefit from more housing supply, with particular attention paid to the underserved low-rise segment of the market.<\/p>\n

Further, RBC economist Robert Hogue flagged rental unit construction as a segment of the market that continues to come up short in cities like Toronto, Vancouver and Montreal. While there\u2019s a demand gap in all of these markets, Toronto is the only city that is not going to come close to bridging the gap in the next five years unless the pace of rental building increases substantially.<\/p>\n

There are few reasons to believe your fortunes as a financially strained Toronto renter will change over the next few years, but zooming out to the national level, it also isn\u2019t totally set in stone that the current \u201crelentless\u201d rate of Canadian homebuilding will stay so high flying for long.<\/p>\n

While it\u2019s true that market fundamentals appear to be conspiring to keep housing humming along in Canada, the global economic backdrop is \u201cdeteriorating,\u201d writes TD\u2019s Sondhi.<\/p>\n

Uncertainty over Brexit, political turbulence in the US, a Trump-led trade war with China and an ever-present threat of a global recession are all reasons to be wary of anyone who says the good times are sure to keep on rolling for the Canadian housing market.<\/p>\n

Homes are Being Built at a “Relentless” Pace in Canada – Here’s Why It’s Still Not Enough<\/a> by Sean MacKay | Livabl<\/p>\n","protected":false},"excerpt":{"rendered":"

Canadian homebuilding continued to beat expectations through the early fall, but when you take a good, hard look at the economic fundamentals driving the pace of activity, it shouldn\u2019t come … [read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":["post-13902","post","type-post","status-publish","format-standard","hentry","category-market-updates"],"yoast_head":"\nCanadian Homebuilding is Still Not Enough • Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.roryc.ca\/blog\/2019\/10\/canadian-homebuilding-is-still-not-enough\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Canadian 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