Housing starts skyrocketed in August, according to CMHC’s most recent trend measure, led in large part by strong condo activity.
“Housing starts have been trending up, supported by strong condominium activity in Toronto. This is in line with CMHC’s most recent forecasts that would see demand shift from new higher-priced single-detached homes towards lower-priced alternatives,” Bob Dugan, CMHC’s chief economist, said in a release. “While national starts have increased, housing construction has started to slow in Alberta and Saskatchewan as a result of weakening economic conditions related to the decline of oil prices.”
Brokers often lose out to the big banks when it comes to funding mortgages for new-build units, according to one industry player, who says they are often handcuffed by shorter monoline rate holds.
The segment’s continuing growth suggests brokers will continue to have to work hard to win their slice of that pie.
“We usually can only compete for new build business in the last 120 days because, generally speaking, monolines offer much shorter rate holds than the banks,” Jivan Sanghera, a GTA-based broker with Dominion Lending Centres
Home Capital Solutions, told MortgageBrokerNews.ca. “It’s definitely tougher business to win.”
Banks, on the other hand, offer longer rate holds and clients often have to re-qualify if they want to go with a broker on new build deals, according to Sanghera.
Broker channel players also have to compete against in-house bank specialists who have the first shot at clients who visit developer offices, Sanghera says.
The CMHC’s trend measure for Canadian housing starts was 196,565 units in August – up from 185,642 in July.
The CMHC uses its trend measure along with its monthly seasonally adjusted annual rates of housing starts to provide an accurate picture of housing start trends in Canada.
“The standalone monthly SAAR was 216,924 units in August, up from 193,253 units in July,” CMHC writes. “The SAAR of urban starts increased by 13.6 per cent in August to 201,312 units.”
Multi-unit starts, meanwhile, increased by 19.5% to 142,927 in August.