Toronto 2006 Housing Starts (and condos)

[Mike in TO]

CMHC Press Release:

Toronto Housing Starts Lower in 2006

Jan 9 - The Canada Mortgage and Housing Corporation (CMHC) has released preliminary housing starts data for December 2006 and the year today.

Foundations were laid for a total of 37,080 new homes last year in the Toronto CMA - a 11% decline compared to 2005. A dip of almost 14% in new ground-oriented (i.e. single-detached, semi-detached and row houses) home construction played the largest role in this decline.

"The cost of building a new home has been increaing steadily since the late 1990s. These increased costs have been passed onto buyers in the form of higher home prices," according to Jason Mercer, CMHC's Senior Market Analyst for the GTA. "Higher home prices have prompted many households to purchase less-expensive housing types, including condominium apartments."

The number of condominium apartment starts reached the second-higher level on record - down six per cent compared to the 2005 record of 14,376.

"Developers of condominium apartments enjoyed record and near-record pre-construction sales over the past two years. These sales converted into strong starts," continued Mercer.

Toronto CMA
Total 2006 Starts: 37,080
Singe-Detached: 14,120
Multiple-family: 22,960

 

[Mike in TO]

Housing Market

Builders' chief happy with cooling market

Federal agency finds home starts down 11% in Toronto area but higher across Canada

January 10, 2007
Tony Wong
business reporter

Brian Johnston expects a less frenzied real estate development market this year. But it won't necessarily be a bad thing.

The president of Toronto-based Monarch Development Corp., one of Canada's largest home builders, is coming off a record year.

The company built 1,100 houses and 800 condos in 2006, but doesn't expect to match that in 2007.

"We've had a very strong year," Johnston said in an interview. "We've been running flat out. But 2007 will definitely see a cooling down."

Johnston said Monarch expects volume to decline in the 15 to 20 per cent range this year, in line with what most developers are forecasting. Given the record pace of building over the past several years, some are welcoming a more balanced market.

Johnston, who is also the president of the Ontario Home Builders' Association, said higher home prices have already started to take the steam out of the real estate market.

In the Toronto area, housing starts declined 11 per cent, according to a report released yesterday by Canada Mortgage and Housing Corp.

The federal housing agency said 37,080 new homes were started last year, compared with 41,596 in 2005. CMHC considers a home "started" when the foundation is poured.

Higher prices, particularly for "ground level" homes (single detached, semi-detached or row housing) were largely blamed for the drop.

"The cost of building a new home has been steadily increasing since the late 1990s," said Jason Mercer, senior market analyst at CMHC. "These increased costs have been passed on to buyers in the form of higher home prices."

Johnston said buyers have been shifting to cheaper highrise condominium housing, but that may start to run into a labour shortage.

"We're at the point now where we have an adequate supply of low-rise trades, but a real shortage of skilled highrise trades," Johnston said.

Condo starts reached the second-highest level on record last year, although they were still down 6 per cent from the 2005 record of 14,376.

Ted Tsiakopoulos, CMHC Ontario economist, said 2006 starts were dampened somewhat by more listings in the resale-home market.

"Rising detached-home prices and cooler hiring trends in high-paying sectors suggest demand will continue shifting away from more expensive to more modestly priced housing," Tsiakopoulos said.

Johnston said the Ontario real estate market has "avoided the market meltdown" that has occurred in parts of the United States.

"We've been very fortunate. This year has been better than most people realize."

Parts of Canada, though, including Alberta and British Columbia, are exhibiting "classic signs" of an impending market correction. "Prices are way ahead of where they should be."

Ontario prices, meanwhile, have risen steadily, but not drastically.

"Developers like to see prices go up, but not too much.

"It's like drinking champagne. You get a headache the next morning."

Other issues facing Ontario developers in 2007 are a softer provincial economy and higher land prices, which have translated into higher housing prices, Johnston said.

Sustainable growth is another hot-button issue. A recent association survey of builders found that the top priority was public-sector investment in infrastructure to address continued population growth. Homes are going up in the suburbs, but the development of roads, sewer systems and schools isn't keeping up.

With the western provinces going strong, Canadian housing starts finished the year at 227,400, the second-highest level in nearly two decades.

"Canadian housing will remain in relatively good shape this year, underpinned by a still-healthy labour market and relatively low mortgage rates," BMO Capital Markets chief economist Sherry Cooper said in a note.

 

[billonlogan]

Re: Housing Market

Sustainable growth is another hot-button issue. A recent association survey of builders found that the top priority was public-sector investment in infrastructure to address continued population growth. Homes are going up in the suburbs, but the development of roads, sewer systems and schools isn't keeping up.

This was the case 20 years ago when the suburbs were booming and things still have not changed. It's especially bad in Durham Region. Taunton Road through Oshawa and Clarington is a nightmare. In addition to the 1000's of new homes and a new power center at Taunton and Harmony, it is still a 2 lane country road. Jeez, the service road going into the power centre is 4 lanes, which the builder put in. It took the Town of Markham almost 20 years to widen the stretch of McCowan Rd south of Hwy 7 to Steeles.