housing
NEW SUPPLY RUNNING DRY? Robust housing demand seems to be hogging most of the headlines these days—especially in Metro Vancouver—but limited housing supply is also contributing to the rise in prices we’ve seen over the past year. Within the resale market, current home owners are reluctant to list their home knowing they will, in most cases, have to turn around and buy back into a highly-competitive market; furthermore, though the unemployment rate is high, continued government financial support and loose monetary policy has created affordable conditions for most owners.
Unfortunately, new supply doesn’t appear to be the knight in shining armour we might want it to be, with total housing starts in Metro Vancouver down 16% in the past 12 months versus the previous 12 months. This stands in contrast to the situation in Greater Montreal (starts are up 7%) and Greater Toronto (where they are up 31%). With job recovery continuing and migration set to reach new heights within the next year, true supply relief is likely to remain elusive.
METRO VANCOUVER’S NEW HOME CONSTRUCTION NEEDS A JUMP-START
50,000
206,651
40,000
38,960
35,550
30,000
27,720
22,741
20,000
10,000
0
MONTREAL
TORONTO
VANCOUVER
BRITISH COLUMBIA
CANADA
7%
31%
16%
15%
5%
HOUSING STARTS, PAST MONTHS
CHANGE VS. PREVIOUS MONTHS %
SOURCE: CANADA MORTGAGE & HOUSING CORPORATION DATA: TOTAL HOUSING STARTS
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