Canadians are about to see a flood of housing supply like they’ve never seen before. An RBC analysis found multi-year highs for various stages of new home construction in Q2 2021. New housing starts reached the highest level in over three decades. Homes completed are expected to hit a similar multi-decade high in the next few months. Canada has never before seen this many homes under construction at the same time.
Canadian New Housing Starts Hit The Highest Level Since 1977
Canadian new housing starts reached the highest level in over three decades. The seasonally adjusted annual rate (SAAR) of housing starts reached 260,500 units in Q2 2021. This is 27.95% higher than last year, and 26% higher than the average for 2015 to 2019. A start is when the foundation has been prepared for the home. These units will generally contribute to the supply within the next two years.
Canadian Housing Starts
The SAAR of housing starts in Canada.
Source: CMHC; RBC; Better Dwelling.
Canada Has Never Seen More Homes Under Construction
Canada has never seen so many homes under construction before. The SAAR of homes under construction reached 320,000 in Q2 2021, up 13.30% from a year before. This is an all-time record for the number of homes currently in the process of being finished. RBC warns a labor and material shortage might lead to delays for some deliveries. However, it appears the material shortage is beginning to ease.
Canadian Homes Under Construction
The SAAR of housing under construction in Canada.
Source: CMHC; RBC; Better Dwelling.
The record probably doesn’t surprise anyone living in a place like Toronto. The City has had the most high-rise cranes deployed in North America, for years now. Some of those units are actually going to be delivered soon.
Canadian Housing Completions Are Forecast To Hit The Highest Level Since The 70s
Even with the delays, housing completions are still the highest in over a decade. The SAAR of complete homes reached 215,000 units in Q2 2021, up 14.71% from a year before. This is the highest number of homes completed since 2006. It’s been a long time since Canada has seen such a large volume of housing created.
Canadian Housing Completions
The SAAR of housing completions in Canada, and the RBC forecast for 2022.
Source: CMHC; RBC; Better Dwelling.
RBC has forecast the number of completions is about to hit the highest level in a generation. They see completions reaching as high as 240,000 homes in 2022, about 12.15% higher than current levels. The last time this many houses were completed was the 70s, so they have lofty expectations.
Canada was experiencing a mini home building boom before the pandemic. However, this was largely confined to a few key cities where the market was scorching hot. Plummeting interest rates and soaring home prices turned this into a national trend. It generally takes a few months after delivery for the market to adjust to the price relief the supply would provide. As long as household credit isn’t further expanded and the market doesn’t roll the value into the price that is.
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Regardless of the supply, the prices remain same. High, Higher, Highest. Builders, Banks and Government always comes with innovative ways to keep the prices to 1 million +.
Are most of these units reserved for blackrock and blackstone?
Bets that any of these new residential units – SFH, condos, or apartments – will factor in the future demands of climate change?
Right. So we’ll be stuck with an enormous new inventory of buildings (and their corresponding infrastructure) that aren’t up for the task and are little improved versions of the inventory we built in the 70’s. If we’re gonna do this this way maybe we should radically update building codes now to address our penchant for poor efficiency and urban heating while we can. Oh, I forgot. That costs us money right now.
And they’re all going to be sold to foreign entities who will bleed the Canadian renter dry while they clean their dirty money. Lovely world we live in.
250 people applying to each basement suite for $1200 in KAMLOOPS, BC? Million dollar homes all over the place in Chilliwack, Kamloops, Vernon, and Kelowna? People living in uninsulated converted garages with no access to laundry, a hotplate and a microwave to eat with, and throttled warm water to bathe in?
I went to look at one room rental. There was 6 people above me. Grandpa, parents, adult kids. Then they had the basement converted into 2 two-bedroom suites. The suite sharing my wall had 4 people living in it. And I was going to rent a room for $750 to live with a international student who didn’t know how to clean or wear deodorant. So twelve people in one house.
Canadians living two to a room, in vans, in cars, in tents. While during a drug and viral pandemic.
Who could have ever saw this happening to Canada? I feel like I’m living in a movie.
A horror movie.
Meanwhile 0.25 Bank of Canada lending rate and Trudeau is printing $50 million a day to keep this farce going.
What is the per capita housing start to population. That’s the only metric that matters. The population in 1970 was a third less
That has no relevance at all, since it’s only the marginal buyer that consumes new housing.
It also doesn’t adjust for the fact an older population needs less housing, with many of these older people living with kids or institutional facilities, not on their own.
This is a bit of a giggle.
I’ve always heard that affordable housing is really not possible because of red tape within municipalities and builders. Permits and the like. I kept thinking, how can this be true when everywhere I freaking look surrounding Brampton, Caledon, Duffern county and anywhere else there are tons of new builds and sites being prepped.
I can see only multiple families, new immigrants, and millionaires having any access to this.
And we can forget about affordable housing. It’s not really in the cards. We have to get used to a new way of life. Single people, young families, and those with lower financial abilities will always be stuck between the walls of others.
Feds are wanting 300,000+ immigrants to come to Canada in a year and we will have another 240,000 homes? Not enough houses now and people have to live somewhere. 240,000 sounds like a drop in the bucket for current needs.
Also, don’t assume that Boomers want to move out of their houses. I know ladies in their 80’s and 90’s living alone in their homes and they have no intention of going anywhere. Older couples are still in their homes too. The only way they want to leave is in a pine box. Of course, bankers want them to leave and promote a smaller place, a new condo, renting, taking out a mortgage for whatever. Bankers are just in it for the money, not to help their clients.
I hope that newer houses being built incorporate Passive House structural features. We’re just at the beginning of climate change. This is going to get nastier.
Thanks for writing this website. I am enjoying reading the articles and recently learning about money laundering. It’s too bad a beautiful place like Vancouver succumbed to the crimes. But, of course, with everyone in on the take – the Feds, the bankers, the criminals – what can we do? We will end up paying for this big time in the future.
Its a nightmare.
And I walk every morning and every night and see all kinds of elderly living alone in 4 bedroom + den houses in my area.
And I don’t blame them. It’s just interesting.
Its also interesting that generally any new home bought by the middle class will have at least one basement suite, whether built into the house originally or converted. Many will have 3-4 with garage conversions etc.
And yet we still can’t keep up with the flood of immigration and international students.