residential
05. residential
Vancouver continues to trend below last year’s pace in contrast to modest construction increases in some Canadian metro markets.
WITH DEMAND TEMPORARILY STAGNATING, A SLOWDOWN IN STARTS
While a number of macro factors influence all of Canada’s regional housing markets—think interest rates, national immigration trends, and mortgage rules, to name a few—Canada’s regional housing markets are, well, distinctly regional. If they weren’t, supply, demand, and prices would all move in a synchronized manner, which they don’t. Local demographic trends, land use policies, geographic constraints, and economic fundamentals all play a role in differentiating our housing markets coast to coast. It is therefore unsurprising to note that the pattern of new apartment construction has differed in Metro Vancouver compared to other large metros. Most obviously, cumulative apartment starts in Metro Vancouver in the four quarters ending in Q1 2019 are down 20% versus the same period one year ago. In contrast, each of Toronto, Calgary, and Edmonton saw apartment starts
increase over the same period by 12%, 8%, and 7%, respectively. It goes without saying that Calgary and Edmonton are in the process of digging themselves out of an economic rut, so an increase in construction activity is to be expected (note, however, that while the combined populations of the Calgary Region and Greater Edmonton is roughly the same as Metro Vancouver’s, their collective apartment starts over the past year were still 55% below those of Metro Vancouver). Toronto is perhaps a better point of comparison, as its housing market has faced similar headwinds to Vancouver’s. Having said that, Toronto’s market seems to be normalizing faster than Vancouver’s, and until demand more obviously re-emerges from the sidelines, there may be additional quarters ahead of relatively modest new apartment construction.
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