Homes Under Construction In Canada Reach An All-Time High As Builders Are Tackling Supply Shortage
The number of homes under construction in Canada has reached an all-time high as builders across the country continue to expand the housing stock, according to a recent RBC analysis report.
Housing starts over the past 12 months were the strongest since the mid-1970s, and the number of homes under construction is at an all-time high, said the report.
Historically low interest rates, stockpiled household savings and changing housing needs that are triggered by the pandemic have sent an unprecedented wave of Canadians rushing to buy a home.
“[Permit approvers and builders]’ answer has been dramatic. In the past 12 months, builders across the country have poured the foundations (defining a housing start) for the highest number of housing units (260,500) than at any time since 1977,” said the report.
“This represented a 26% or 53,600-unit increase relative to the 2015-2019 average pace (206,900 units).”
There are nearly 320,000 housing units under construction in Canada. This is by far the highest number, and a 12% (or more than 30,000-unit) increase from the end of 2019. About three-quarters of the total are apartments (mostly condos but also rental).
“Apartments (both condos and purpose-built rental) not only accounted for most (55%) of the housing starts over the past 12 months, but also showed the biggest increase (39%) from the 2015-2019 average.”
Supply chain issues are likely to persist as it takes time for new construction to reach the move-in stage. The report notes that the average timeline has more than doubled over the past two decades, from 9 months to 21 months, depending on the property type.
According to the report, housing starts barely increased in the Toronto region in the past 12 months compared to the 2015-2019 average, rising just 1.4% or 500 units. The relatively flat starts in this area, in part, reflect a significant drop in pre-construction condo sales in 2018 and 2019 following Ontario’s Fair Housing Plan in 2017.
“A recent spike in building-permit issuance suggests the pace could pick up,” said the report.
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