CMHC is suggesting the Canadian construction boom may be over for now -- a lull in activity set to protect increasingly anxious condo investors.
“Overall, housing starts are projected to remain somewhat stable, at 187,300 units in 2014," reads the corporation's Q1 report, released this week. "In 2015, housing starts are expected to moderate to 184,900 units.”
There are currently a great number of housing developments currently under construction and builders are expected to pull back on starting new builds until demand is met, according to CMHC, suggesting a spike in rates over the course of the year will also tamp down on new construction.
That may be the equivalent of shutting the barn door after the horse has already bolted, said one condo investor Friday, but the slowdown will help to limit any further growth in the already mountainous condo inventory expected to hit markets such as Toronto this year.
"We don't need any more developments in the GTA," said Brice Minns, an investors with more than fie condo units scattered across Etobicoke.“It's the slowdown is coming late, but it will still help to keep rents decent."
Also likely to benefit Minns is the number of young Canadians prepared to hold off on their home purchases.
"Slowdown in the growth of the pool of first-time buyers in late 2014 and into 2015 will lead to further moderation of housing starts next year,” says CMHC.
That trend is expected to carry on, with housing starts slowly declining following a construction boom two years ago.
“Even with modest improvements in economic conditions in the latter half of 2013, slower employment and income growth in the first half of the year led to more modest housing demand overall,” CMHC states. “As a result, housing starts slowed to a total of 187,923 units in 2013 from 214,827 units in 2012.”
Source: Canadian Real Estate Wealth
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