New Housing

Canadian Data Release: Housing starts

Canadian Data Release: Housing starts dip in March but remain elevated

  • Canadian housing starts edged lower to 225.2k (annualized) units in March, down 2.5% from February’s upwardly revised figure (231k) but still an elevated pace of homebuilding. The underlying trend in starts ticked higher to 227k over the last six months.
  • Single-detached starts advanced 8% to 76.6k units with the gains offset by a decline in the multifamily segment, where starts were down 7% to 148.6k units.
  • March’s drop was concentrated in Ontario (-31k to 75k units). This was expected after starts posted an unsustainable gain in February. Starts also dropped in Nova Scotia (-2.3k to 3.1k units) and Saskatchewan (-1.4k to 2.2k units). On the flip side, starts were higher in most other provinces, led by B.C. (+15.5k to 49.4k units), Newfoundland and Labrador (+5k to 6.3k units) and Alberta (+3k to 37k units). Starts were largely flat in PEI during March.
  • Starts were down notably in Toronto (-33k to 38.3k units), owing to a drop in the multi-family sector from an unsustainably heated pace. Starts also declined in Montreal (-6.7k to 20.3k units). Conversely, starts were higher in Vancouver (+12.2k to 32.4k units).

Key Implications

  • Homebuilding continues to defy gravity, with another strong print for starts in March. Over the past six months starts have averaged a solid 227k, with healthy population gains and on-going economic growth providing a boost for demand. Builders are also responding to past increases in pre-construction condo sales, a factor that should provide some support to starts going forward.
  • In the first quarter, starts averaged 227k, about in line with their fourth quarter level. While new housing construction is holding up, a plunge in home sales suggests that residential investment will subtract notably from Q1 growth.
  • Going forward, starts will likely ease from their solid Q1 pace, in light of rising interest rates, regulation, and a softer price environment. However, recent permit issuance points to only a gradual moderation.

Fifth Dimension Complimentary Report – Q4 2017

Activity in Metro Vancouver’s new multifamily home market was robust to end the year and is projected to continue in 2018. In the final quarter of 2017 an overall total of 4,276 new multifamily home sales were reported. Predominant purchasers this quarter were both end users taking advantage of pre ‘stress-test’ interest rates and investor buyers seeking pre-sale condominium product. This figure was up four percent from last quarter and was similar to the same quarter last year. Of note, projects in the Fraser Valley represented 42 percent of Fourth Quarter sales in Metro Vancouver which is nearly double the mark set the year prior. This trend is projected to continue.

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Fifth Dimension Complimentary Report – Q2 2017

Despite somewhat uncertain times, 4,885 new multifamily homes were sold in the Second Quarter of 2017 making the mid-year total the second best since 2010. Sustained demand, along with another similar quarter of 3,000+ units sold is projected for the Third Quarter of 2017. Inventory levels remain an issue, and for the first time in the last few years, a sentiment of uncertainty is emerging in the industry largely related to the change in government. Despite this, prices are rapidly appreciating – as are absorptions. The multifamily development remains a “green light” rated opportunity in each and every market area within the Metro Vancouver.

We hope you find this comprehensive analysis of the Metropolitan Vancouver multifamily residential real estate market for the Second Quarter of 2017 informative and thought provoking. As always, feel free to share this report as widely as you see fit.

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UDI State of the Market Report – Q1 2017

NEW MULTI-FAMILY HOUSING AVAILABILITY FALLS OFF A CLIFF ACROSS METRO VANCOUVER

VANCOUVER, BC —Availability of new multi-family housing has reached historic lows with zero new townhomes completed and move-in ready in Vancouver, and only 16 townhomes and 15 condos ready for occupancy in the entire Metro region (Lower Mainland) at the end of March 2017. These startling findings are in UDI’s first quarter State of the Market 2017 Research Report. The independent report tracks quarterly population growth with new home sales, prices and supply.
“We clearly need a regional housing strategy with more homes for more people,” says UDI President & CEO Anne McMullin.  “That means more high-rise apartments along rapid transit corridors and more townhomes, rowhomes, multi-family low-rises, duplexes and laneway homes in traditional single family neighborhoods.”

While pre-sales in various forms of construction were available for purchase as part of overall “inventory”, that doesn’t help someone who’s just moved here for a new job with a family, and needs a new home today, she added. “What’s causing the supply shortage is the restrictive single family home neighborhood zoning on 85% of our residential land base, available to a select few high income earners who can buy there. That keeps out young families, middle income earners and renters, who can’t afford single family homes.”

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UDI State of the Market report is produced by Urban Analytics and sponsored by Terra Law.

Fifth Dimension Complimentary Report – Lack of Supply A Consistent Issue

Fifth Dimension provide a complimentary report on the multifamily residential real estate market in Metro Vancouver.

3,882 new multifamily homes were sold in the First Quarter of 2017. Sustained demand, along with another similar quarter or 4,000+ units sold is projected for the Second Quarter of 2017. It is possible this number could be exceeded but this is solely dependent on accelerating the levels of supply.

Inventory levels are down 59 percent compared to an eight-year average and completed inventory levels are at an all-time low. Buying pre-sale is basically a norm/requirement now. Thus, the multifamily development remains a “green light” rated opportunity in each and every market area within the Metro Vancouver market.

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Content provided by Fifth Avenue Real Estate Marketing Ltd.