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PM Justin Trudeau's Canada

Canada's developers are building less housing despite crunch, a new study says. That could keep prices up​

https://www.cbc.ca/news/canada/toronto/housing-development-slow-canada-1.6989582

Despite a desperate need for new housing, Canada's developers are building fewer homes than they were at the height of pandemic lockdowns, a new study says – and experts say that could mean a generation of Canadians won't be able to afford homes for most of their adult lives.

Inflation and the Bank of Canada's response to it, has been the main reason for the slowdown, according to David Macdonald, a senior economist with the Canadian Centre for Policy Alternatives (CCPA).

The new decline in housing development started last year, when the Bank of Canada started to raise interest rates to cool the economy and combat inflation, Macdonald found in a new report for CCPA.

Compared to April 2020, when lockdowns shut down part of the development industry, investment in new single-family homes is down 21 per cent, the report says. New apartment construction is down two per cent from that time and row house development is down eight per cent.

"The impact of Bank of Canada rate hikes have been breathtaking," Macdonald wrote in his report.

They're also unsurprising, he says.

"If you have to take out a loan to engage in a type of economic activity, higher interest rates matter," Macdonald wrote.

"This means that higher interest rates increase carrying costs for businesses looking to build things like residential housing or consumers looking to buy those houses."
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Some developers wary to invest​

In the CCPA report, Macdonald says interest rates will only continue deterring private development.

The problem: from planning to approval to construction, housing developments can take five to 10 years before they're ready for residents to move-in.

With interest rates uncertain and costs changing quickly, projects are becoming riskier, some developers say.

"Many people in industry are…more cautious," Sherry Larjani, president of Spotlight Development in Toronto, told CBC Toronto.
Larjani says high interest rates have also made it harder to find buyers, as extra costs are passed on and mortgage rates become less affordable and harder to predict. She says she's seeing some developers cancel projects as a result.

Lengthy approvals processes are also making things difficult, Larjani says.

"It's not only that the construction cost goes up, it's not only that the rates are up, it's not only that people can't afford their daily food and shelter – it is the fact that the government has not figured out how to streamline the process (to approve developments)."
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Could mean? We already can't. No amount of housing built now is going to put us in reach of a home. This is entirely going to benefit the next generation.
 
A familiar face could be eyeing the federal Liberal nomination in Toronto-St. Paul's. Current MP Carolyn Bennett will not run for re-election.

Several Liberal sources said Coun. Josh Matlow is considering a run for the Liberal nomination in the riding, which includes the ward he represents on Toronto City Council.
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christiesplits said:
A familiar face could be eyeing the federal Liberal nomination in Toronto-St. Paul's. Current MP Carolyn Bennett will not run for re-election.



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I am not sure how well he will do.

Federal Politics is alot different from grassroots local politics. He is great as a councilor but I am not sure how well he would do with bigger issues like defense, foreign aid, etc as opposed to local issues that matter.
 
Richard White said:
I am not sure how well he will do.

Federal Politics is alot different from grassroots local politics. He is great as a councilor but I am not sure how well he would do with bigger issues like defense, foreign aid, etc as opposed to local issues that matter.
Click to expand...

I think it has less to do with policy, and more with personality. Some politicians work better in a council chamber where they can showcase their independence. If Matlow runs and wins, he'll be a newbie backbencher with a party whip overseeing his every move. Oh, and if the tea leaves are correct, he'll likely be in opposition.
 
Admiral Beez said:

Paywall free: https://archive.ph/e5s3W

The problem for the LPC is succession. Freeland is competent, but not a Quebecer. Joly is a Quebecer but weak. Anand can likely hold her Oakville seat, but none of these three as LPC leader are going to beat the Cons in seat-rich Ontario. Who else is there as a potential Trudeau successor?
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Can we bring Chretien back?
 
The Bank of Canada, raising interest rates, is the main reason for the Liberals decline in support. People are pissed off they have to pay
thousands more for their mortgages, and they are blaming the Liberals whether that is right/wrong.
Add the fact that, interest rates hikes are making the housing crisis worst, and hurting first time home buyers.
 
Brands said:
The Bank of Canada, raising interest rates, is the main reason for the Liberals decline in support. People are pissed off they have to pay
thousands more for their mortgages, and they are blaming the Liberals whether that is right/wrong.
Add the fact that, interest rates hikes are making the housing crisis worst, and hurting first time home buyers.
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There is little doubt that that is a contributing factor, bit it needs to be said the Libs have rarely seen above the low 30s in polling in the last 6+ years.

I don't say that to denigrate them or the centrist vote; but simply to put out there, this is not a catastrophic fall in the last few weeks or months, its an erosion of support from a relatively modest position to begin with.

Which, I am content to agree is driven by interest rates to a great degree; though I suspect high grocery prices are also playing into this, among other things.
 
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Brands said:
The Bank of Canada, raising interest rates, is the main reason for the Liberals decline in support. People are pissed off they have to pay
thousands more for their mortgages, and they are blaming the Liberals whether that is right/wrong.
Add the fact that, interest rates hikes are making the housing crisis worst, and hurting first time home buyers.
Click to expand...

You may be on to something.

The highest interest rates ever recorded in Canada was in August 1981 when they reached 22%. Coincidentally, it was Pierre Trudeau who was in office at the time and the coming election in 1984 saw the Liberals lose to the PC Party.
 
Richard White said:
You may be on to something.

The highest interest rates ever recorded in Canada was in August 1981 when they reached 22%. Coincidentally, it was Pierre Trudeau who was in office at the time and the coming election in 1984 saw the Liberals lose to the PC Party.
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I remember as a kid having a GIC that paid out close to 20%. That's one of the issues today, we have high borrowing rates, but the banks are not giving equally high saving rates.

 
Admiral Beez said:
I remember as a kid having a GIC that paid out close to 20%. That's one of the issues today, we have high borrowing rates, but the banks are not giving equally high saving rates.

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I would prefer interest rates to be at 20% again. The Housing Market is overheated and raising the rates astronomically high should pop the bubble.

At 20% we are looking at around $15000 a month for mortgage payments on a million dollar home. Watch how much supply comes onto the market and how quickly prices tank.
 
Richard White said:
At 20% we are looking at around $15000 a month for mortgage payments on a million dollar home. Watch how much supply comes onto the market and how quickly prices tank.
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We're not going to see 20% mortgage rates. A five year variable rate today is 6.05%, and rates are expected to start coming down in 2024.

Ontario

Find today’s lowest mortgage rates in Ontario. Compare offers from over 30 of Canada’s leading banks and brokers. Just like that.
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wowa.ca

Mortgage Interest Rate Forecast 2023-2028 | WOWA.ca

Read about the path of interest rates over the coming years and use WOWA’s mortgage rate forecast to minimize your mortgage interest payment.
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