Canada Mortgage and Housing Corp. Says Annual Pace of Housing Starts Slowed in August
Canada Mortgage and Housing Corp. says the annual pace of housing starts in August slowed compared with July as the rate of new home construction continued to slow from their highs earlier this year. The housing agency says the seasonally adjusted annual rate of housing starts was 260,239 units in August, down from 270,744 in July.
The pace slowed as the annual rate of urban starts fell 4.7% in August to 235,782. The annual rate of urban starts for apartments, condos and other types of multiple-unit housing projects dropped 5.7% to 173,120, while the rate of single-detached urban starts fell 2% to 62,662. CMHC estimated rural starts at a seasonally adjusted annual rate of 24,457.
The six-month moving average of the monthly seasonally adjusted annual rate of housing starts was 283,971 in August, down from 286,076 in July.
Source: The Star
CREA Lowers Home Sales Forecast, but Nudges Average Price Higher
Tight supply conditions and increasing home prices pushed the Canadian Real Estate Association to forecast the country will wrap the year with fewer home sales than it previously predicted. The association revealed an updated forecast on September 15 that predicts 656,300 homes will change hands this year, an almost 19% increase from 2020 levels, but a nearly 4% decrease from the 682,900 it predicted earlier this year.
The record-setting number it is predicting is a downward revision because sales fell more rapidly than expected this spring, but comes as immigration levels are rebounding and Canadian businesses closed during the pandemic are being allowed to reopen.
“The good news is that the urgency and frenzy of earlier in 2021 have started to fade and the market has settled down a bit, at least in a relative sense,” wrote CREA in its forecast announcement. “At this point most housing market indicators appear to be levelling off at a cruising altitude somewhere in between pre- and peak-pandemic levels.”
While buyers in many heated markets avoided putting their homes up for sale in the summer, real estate boards and brokers are predicting supply will return this fall, though they don’t expect much relief from high prices. CREA’s new forecast shows the national average home price is now expected to reach $680,000 this year, up 19.9% from last year. The earlier forecast it released in June had predicted an average price of nearly $678,000 for 2021. While CREA expects prices to rise by 5.6% on an annual basis to reach about $718,000 next year, it is predicting home sales will fall by 12.1% to around 577,000 in 2022.
CREA’s new forecast was released at the same time as the organization publicized August housing numbers that showed the average price reached $680,815 that month, up from $669,654 in July. CREA said seasonally adjusted home sales edged back by 0.5% to 48,379 in August, down from 48,624 in July. On a non-seasonally adjusted basis, home sales amounted to 50,876 in August, down 14% from 59,172 last August.
BMO Capital Markets senior economist Robert Kavcic pointed out in a note to investors that those numbers indicate sales are now down 28% from highs seen earlier in the year, but they are about 20% higher than 2019 and pre-COVID rates. “In other words, the extreme conditions that prompted much concern in policy circles have ebbed, but if not for that burst of madness, we would still be writing about record activity levels today,” he wrote.
CREA said new listings totalled 66,830 on a seasonally adjusted basis in August, up 1.2% from July. On a non-seasonally adjusted basis, they fell by more than 22% to 63,631 in August compared to August 2020.
Kavcic interpreted the numbers to mean that “tight conditions remain across most of the country, but some variability is starting to show up again.” Across 26 major markets tracked by CREA, he noticed 17 saw sales decline in August, though all but six are down from year-ago levels.
Source: The Star
Canadian Housing Markets Currently Cruising Between Pre and Peak Pandemic Levels
The Canadian Real Estate Association (CREA) has released statistics which show that national home sales were little changed between July and August 2021.
Highlights from the report:
- National home sales edged back 0.5% on a month-over-month basis in August;
- Actual (not seasonally adjusted) activity was down 14% on a year-over-year basis;
- The number of newly listed properties ticked up 1.2% from July to August;
- The MLS® Home Price Index (MLS® HPI) rose 0.9% month-over-month and was up 21.3% year-over-year;
- The actual (not seasonally adjusted) national average sale price posted a 13.3% year-over-year gain in August.
“Ideas on how to fix the housing market have taken centre stage in this election, with many long-simmering issues having had a big spotlight shone on them over the last year-and-a-half by COVID,” said Cliff Stevenson, chair of CREA. “The numbers for August provided more evidence of what many of us already knew or suspected to be the case –this housing crisis will not go away on its own. As such, it’s encouraging to see all of the major parties looking at longer-term solutions to an issue that’s been around for a while. It also highlights how there are no quick fixes here, so this market will remain challenging for those who choose or have to engage in it.”
“Canadian housing markets appear to be stabilizing somewhere in between pre- and peak-pandemic levels – which is to say, still extremely unbalanced,” said Shaun Cathcart, CREA’s senior economist. “As far as campaign promises around building more homes, at least we are finally having the right conversation. But as anyone who has tried to get even a small project done in the last year knows, availability of materials and skilled labour are not dials that can simply be turned up to 11 whenever we decide we need them. And that’s not to mention all the other barriers to building, of which there are many. It’s definitely easier said than done.”