Canadians will soon see an unprecedented increase in housing supply. RBC’s analysis revealed multi-year highs in new home construction at various stages during Q2 2021. The highest number of new housing starts in more than three decades was reached in Q2 2021. In the coming months, homes that have been completed will reach a multi-decade record. Canada has never seen so many homes being built at once.

Canadian New Homes Starts Reach Their Highest Level Since 1977

The highest number of new housing starts in Canada in more than three decades has been reached by Canadians. In Q2 2021, the seasonally adjusted annual rate of housing starts was 260,500 units. This is 26.75% more than last year and 26% more than the average for 2015-2019. The foundation is ready for use. These units will usually contribute to the supply in the next two-years.

Canada has Never Had More Homes Under Construction

Canada has never had so many homes in construction. In Q2 2021 the SAAR for homes under construction was 320,000, an increase of 13.30% over the previous year. This record is for the total number of homes in construction. RBC warns that delays could occur if there is a shortage of labor or material. It appears that the shortage of material is starting to improve.
Canadian Homes Under Construction
Source: CMHC; RBC; Better Dwelling.

The record probably doesn’t surprise anyone living in a place like Toronto. The City has had the most high-rise cranes deployed in North America, for years now. Some of those units are actually going to be delivered soon.

Canadian Housing Completions Expected To Reach The Highest Level Since the 70s

Even with delays, housing completions remain at their highest level in more than a decade. In Q2 2021 the SAAR for complete homes was 215,000 units, an increase of 14.71% over the previous year. This is the most homes built since 2006. This is the largest number of homes built in Canada since 2006.

RBC predicts that completions will reach their highest point in a generation. RBC expects completions to reach as high as 240,000 homes by 2022, which is 12.15% more than the current level. They have high expectations because this number of houses was last completed in the 70s.

Canada had a mini boom in home-building before the pandemic. This boom was limited to the most populated cities, where the market was hot. This became a national trend due to plummeting interest rates, and skyrocketing home prices. The market usually takes several months to adjust to the price relief that the supply will provide. So long as household credit doesn’t get expanded further and the market doesn’t roll the value into price, that’s all.

 

Sandi Branker is a Real Estate agent and a Think Ely Real Estate Team member at Zolo Ottawa. She can be reached at (613) 408–7935 or by email at sandi@thinkelyrealestate.com. Facebook| Google My Business |Website Home Page |

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