New Development Of Condominiums In Canada Is Good For Values
The international economic crisis has impacted the market in condominium construction more strongly than any other part of the real estate market in Canada. While there have been an increasing number of house starts in rural regions, and a strong, continuous increase in the construction of single family homes, there has been a marked reduction in the number of starts of condominiums and apartments in cities all over Canada like downtown Toronto condos.
This decline in construction of multiple occupancy buildings has negatively affected the overall average for house starts in March, translating in a decline of 1.5% in all kinds of house starts, across the country. This was the first reduction in house starts in 2010. There was a growth of 7.5 percent during January and 6 percent over February. March saw 197,300 house starts, compared with January’s 189,000 and February’s 200,400.
It is in urban areas that the decline in house starts has been most severe. Starts have increased in a few rural areas of Canada, despite the overall drop in housing starts across the nation as a whole. There was a slide of 4.2 percent in urban starts in March, while rural starts climbed from February’s 17,600 to a total of 22,100 in March. This reflects the adjustment in starts of multiple family dwellings, which are usually built within a city or on its outskirts. Single family homes are the preference in rural regions.
There was an increase during March in the amount of starts for single occupancy buildings, of 6.9 percent, while starts of multiple unit buildings fell by 15.2 percent during the same month. March was the eleventh month in a row that single property starts had grown, taking them from their lowest level of the economic downturn, in the preceding April, to the highest they have been over the past few years.
The Toronto area experienced a big reduction in multiple occupancy building activities, with lower interest in building new Toronto condominiums and high rises over many months. This decrease was evened out by an increase in starts of single occupancy residences in rows and low rises in the Toronto area, however, reflecting the wider snapshot nationwide.
An expert market researcher from the CMHC (Canada Mortgage and Housing Corporation), Shaun Hildebrand, who specializes in the Toronto area, believes that things may soon change. The rising call for for less expensive kinds of accommodation in the local area is likely to result in the building of more condos, he said.
Starts of multiple occupancy buildings do tend to vary more wildly than those of single family homes, with variations occurring far more quickly. The Canadian condo sector is a volatile one, in the opinion of Bob Dugan, who is the chief economist at the Canada Mortgage and Housing Corporation Centre for Market Analysis.
The significant decline in starts of multiple unit real estate in March came after a fall of 0.5% in building permits in February, which was largely due to a decrease in applications for permission to construct new apartments and condominiums.
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