David McKay, chief executive of the Royal Bank
of Canada, believes consumer demand is roughly in line with supply, particularly after housing starts dipped 16 per cent last month.
McKay told a New York audience that he “feels good about the Canadian housing market,” adding that he anticipates a 2.4 per cent economic growth for the country this year.
He also assured that Canada’s multi-family residential housing, such as condominiums, are not financed without selling at least 70 per cent to 80 per cent of the units prior to construction. McKay said this is to prevent “the speculative build of excess supply.”
McKay admitted, however, that there is a shortage in new single-family homes for markets such as Vancouver and Toronto as new land is not being released into construction.
“A lot of the price inflation that you’re reading about in the Canadian housing market is largely driven by lack of supply in single-family homes, strong household formation, strong immigration numbers – so demand is still there,” he said.