A faster-than-expected lull in new construction may be an early Christmas present for Canadian landlords as they look to hold onto their favourable market in the new year.
Landlords, now may be the time to stop fretting about over-supply in the market squeezing down your rental income.
According to new housing start figures for the month of November, construction has finally slowed down in the country’s major urban centres.
There were 192,235 housing starts in November, compared to 198,161 in October, far below initial industry expectations. Economists are anticipating that this is the start of an anticipated decline in housing construction.
“Overall, housing starts have been following a trend similar to sales on the existing home market. As sales rise relative to listings of existing homes, buyers are increasingly meeting their needs in the new home market,” said Mathieu Laberge, Deputy Chief Economist at CMHC.
While housing starts fell in Ontario and Atlantic Canada, they rose in British Columbia and the Prairies during November.
According to a new report from Urbanation, the condo rental market in the GTA has seen a sharp upswing this year.
“We’re seeing some positive early impacts on the market from the increased level of investor-purchased pre-construction condos in recent years,” says Shaun Hildebrand, senior vice-president of Urbanation. “The rapid growth in activity indicates a significant amount of pent-up demand for new rentals.”
2013 was a year of pleasant surprises for Canada’s housing market, says BMO Capital Markets senior economist Sal Guatieri. “Far from extending last year’s deep sales dive on mortgage-rule turbulence, the market pulled up sharply and is cruising at an above-normal altitude.”
Written by Grainne Burns