housing
05. housing
Residential construction activity shows no signs of slowing down as year-over-starts jump 10%.
HOUSING CONSTRUCTION RES-ILIENT IN METRO VANCOUVER
Many metros across Canada have for years struggled to cope with an imbalance between robust population growth (and the accompanyingmagnitudeof housingdemand) and constrained flows of new residential supply. In markets like Vancouver and Toronto, this has contributed to a high and rising price environment that has refocused conversations of housing affordability and availability on the range of issues related to getting more homes built. It is positive then that the pace of housing starts in Metro Vancouver increased in 2019 above the 23,404 starts in 2018. In initiating construction on 28,141 homes last year, starts increased by a not-insignificant 20% on a year-over-year basis to reach an all-time high: 2019’s starts were 0.8% higher than the previous high of 27,914.
At this pace, gross housing construction is in line with the needs associated with housing the region’s growing population, with an average of 25,000 to 30,000 homes required (before demolitions are accounted for) to accommodate population additions in the neighbourhood of 40,000 annually. As context, it is notable that the year-over- year increase in Metro Vancouver’s pace of construction is greater than in Calgary and Edmonton (which rose by 9% and 7%, respectively). Additionally, the 28,141 starts in Metro Vancouver in 2019 were only 8% below Toronto’s 30,462 starts, despite the population of Canada’s largest metro area being 141% larger than Metro Vancouver's. Over the course of 2020 starts are expected to remain elevated, though the medium- term outlook is for some moderation in new construction activity.
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