Canada

Canadian Investment In Residential Home Construction Drops Over 21%

Investment in home building is falling across Canada, especially in its largest real estate markets. Statistics Canada (Stat Can) data shows residential building construction investment was down in May. This trend is strongest in markets like Toronto, Vancouver, and Montreal – where investment has dropped at a faster rate than the national average.

Canadian Residential Building Investment Down 21%

Canadian investment in residential home construction retraced some of the ground lost, but is far from recovered. Investment came in at $7.83 billion in May, up 85.7% from a month before. Despite the big jump this number is still 21.4% lower than the same month last year. The April it’s being compared to was the lowest month for investment in at least 10 years. Not surprising to see investment bounce higher, but it’s still missing about a fifth of monthly activity.

Candian Investment in Residential Building Construction

The percent change in the dollar volume of investment in residential building construction across Canada.

Source: Stat Can, Better Dwelling.

Toronto Residential Building Investment Down 24%

Toronto represented the single largest market for residential building construction investment. The market saw $1.51 billion in investment for May, up 79.5% from a month before. Once again, despite the big jump, the dollar value was still 24.0% lower than last year. May is the second lowest amount of investment seen since 2015, with April being the lowest.

Toronto Investment in Residential Building Construction

The percent change in the dollar volume of investment in residential building construction across Toronto.

Source: Stat Can, Better Dwelling.

Vancouver Residential Building Investment Down 44%

Vancouver’s investment in residential building construction made a much smaller bounce than the national average. Investment came in at $852 million in May, up 13.89% from the month before. Compared to the same month last year, this is a 44.1% decline. Vancouver is recovering at a much slower pace than the national average.

Vancouver Investment in Residential Building Construction

The percent change in the dollar volume of investment in residential building construction across Vancouver.

Source: Stat Can, Better Dwelling.

Montreal Residential Building Investment Down 36%

Montreal is seeing residential building construction investment bounce, but is still far from from recovered. Investment came in at $859 million in May, up 367.8% from the month before. Compared to the same month last year, this is a 36.3% decline. Even with the volume more than tripling from April, it’s not close to recovering.

Montreal Investment in Residential Building Construction

The percent change in the dollar volume of investment in residential building construction across Montreal.

Source: Stat Can, Better Dwelling.

Investment in residential building construction is up off the pandemic low, as the economy begins to re-open. However, the dollar value of investment is a long way from recovering to pre-pandemic levels. This is especially true in cities like Vancouver, that are still seeing a smaller than average bounce post-reopening.

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7 Comments

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  • Jason Chau 2 months ago

    Lower pre-sales, lower investment, lower pre-sale prices. No one is going to want to touch Vancouver multi-family real estate for a few years, at least.

  • GTA Landlord 2 months ago

    I think pre-sale buyers that were thinking cashflow, cashflow, cashflow, and levered up to buy as much property as possible are seeing it’s not easy being a landlord. Going to be a long time before experienced landlords jump in to push new residential construction much higher.

    • James Wilson 2 months ago

      You mean negative “…cashflow, negative cashflow, negative cashflow…,” right?

  • Yan 2 months ago

    Everyone’s excited we almost have a vaccine, but doesn’t realize that vaccine coming soon means about a year.

    • James Wilson 2 months ago

      Not to mention BC is going to be locked down again soon.

      “B.C. warned of potential for ‘explosive growth’ as 102 new COVID-19 cases from over the weekend announced”

      https://www.cbc.ca/news/canada/british-columbia/bc-covid-update-july-20-1.5655625

    • alvi 2 months ago

      By everyone, I gather you mean NASDAQ investors?

    • straw walker 2 months ago

      A Vaccine may or may not appear ever…There is No vaccine for STDs that have plaques mankind for generations, including syphilis. There is NO vaccine for tick transmitted diseases including Lyme’s and rocky mountain fever.
      Mankind has lived with AIDS and NO vaccine…
      The world may well have to learn to live with Wuhan virus

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