Over the past year, the ratio of condos built in Canada’s hottest markets was much higher compared to any other residential asset type, according to a new report by the Canada Mortgage and Housing Corporation.
In its data release late last week, the Crown corporation reported that the nationwide housing starts trend was at 203,554 units in February 2019, falling from the 207,742 units during the same month last year.
“The national trend in housing starts resumed its downward trajectory in February while still remaining above historical average,” CMHC chief economist Bob Dugan said.
“Both single-detached and multi-unit dwellings starts trended lower. Higher mortgage rates combined with still-favourable, but less stimulative economic conditions have contributed to softer demand on new home markets in urban centres.”
The predominance of condos in new construction was most apparent in the Vancouver CMA, which saw single-detached starts fall by 24% compared to February last year, and condo starts dramatically increase to account for 77% of all new housing units in the city last month.
Burnaby was the clear leader in the region, as it represented 50% of the CMA’s new construction activities in February.
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In Montreal, total housing starts fell by 47% annually last month, but “rental apartment construction has continued to show strong growth. The low vacancy rates, the aging of the population and the greater proportion of young households now opting for the rental market have continued to stimulate rental housing starts,” the CMHC noted.
Toronto bucked the trend, however, as much of its lower February numbers were mainly a result of low condo apartment starts.
“Row and semi-detached home starts trended higher underlining their popularity among buyers looking for lower priced ground-oriented homes.”
Demand for the asset class in the region is still showing no signs of stopping, as “sales of new condominium apartment starts have been strong in 2017 and 2018 and these units will continue to break ground throughout this year at a varying pace.”