The Bank of Canada's lower interest rates are significant drivers of the trend
British Columbia and Ontario will be at the vanguard of the nation’s housing starts activity up to at least 2021.
In its March 19 Housing Report (Special Issue), Altus Group noted that recovery will be noticeable in BC “as price adjustments persist, mortgage rates remain low, and declining resale inventories provide less competition to the new home sector.”
“Stronger economic growth and still solid immigration should lift starts next year,” Altus added. BC’s starts last year stood at 44,932 (compared to the 10-year average of 33,850). The predicted levels are at 40,150 starts for 2020, and 42,975 for 2021.
Vancouver would particularly benefit from the trend. “With house price declines moderating, sales of existing homes up, and resale inventory declining, confidence in the Vancouver housing market is returning.”
Ontario’s starts activity over 2020-21 is expected to be even stronger, likely surpassing the 10-year average (ending 2019) of 69,717.
Single‐family starts will take centre stage amid “robust immigration and employment growth, lower prices, purchase incentives and lower mortgage rates.” The province’s overall starts level is projected to be at 76,525 this year, and 77,350 next year.
“Lower mortgage rates are providing some reprieve to homebuyers from rising prices. Elevated in‐migration and remarkably strong job growth are also supportive of new home sales, which should keep starts elevated in 2021.”
