Condo Construction Surges in May 2015

The Canada Mortgage and Housing Corporation (CMHC) has released its May 2015 national housing starts report, announcing a surge in condo construction.

Last month, housing starts were trending at 181,231 units, compared to 179,524 in April. The trending figure is a six-month moving average of monthly seasonally adjusted annual rates (SAAR). It has been modified to remove seasonal variation. The SAAR figures are multiplied by 12 to represent an annual average.

“The small increase in the trend was primarily driven by higher multiple starts in Ontario, the Atlantic region, and Québec,” says Bob Dugan, CMHC’s Chief Economist. “Despite month-to-month variation in multiple starts, CMHC expects builders will continue to focus on managing inventory of completed but unsold units — inventory that is still above historical average. CMHC also forecasts slight moderation in housing starts in 2015 and 2016, reflecting a slowdown in housing market activity in oil-producing provinces that will partly be offset by increased activity in provinces that are seeing the positive impacts of low oil prices.”

Mid-rise condo at Westminster Highlands by Reid's Heritage Homes

We’re not surprised by the rise in multiple starts in Ontario. Only a few weeks ago, we attended the groundbreaking of King Blue Condos by Greenland Group in downtown Toronto. Then shortly after that, we were on the waterfront with Tridel celebrating the start of construction at AQUALINA, the first residential phase of the Bayside Toronto master-plan. Around the same time, Monarch and Mattamy celebrated the official groundbreaking at Riva del Lago on Etobicoke’s waterfront, marking the first major milestone since Mattamy announced the purchase of Monarch. And, just a few days after that, City Core Developments cut the ribbon for the start of construction at Harmony Village Sheppard in Scarborough!

The standalone monthly SAAR was 201,705 units, compared to 183,329 in April. The SAAR of urban starts went up 10.8% to 185,235, with multiple starts jumping 16.9% to 126,367 and single-detached starts staying level at 58,868 units.

As mentioned by Dugan, starts were up in Ontario, the Atlantic region, and Quebec, while British Columbia and the Prairies experienced a decrease in housing starts. Rural starts is estimated at 16,470 units.

Will condo developers in Ontario and across the country begin to manage their inventories of completed and unsold units as predicted by CMHC, or will more units be launched? Stay tuned to find out!