Tag: cmhc

• Housing starts up 63% in Calgary

  

  The Canada Mortgage and Housing Corporation (CMHC) just published its latest housing supply report for Canada’s 6 largest city regions (downloadable over here).

  One figure that stands out is the increase in housing starts in the Calgary CMA — it was up almost 63% last year compared to 2020. This is a positive indicator for that market.

  It’s also worth mentioning that Calgary’s supply is more evenly split between low-rise and apartment housing. This is in contrast to markets like Toronto, where 3/4 of all new housing is now “apartment”, and in Montreal, where the percentage is even higher.

  My view is that it’s time to get more granular with our reporting of higher density housing. In the above example, we are showing 3 categories for grade-related housing and only 1 for anything outside of that.

  This is our national bias toward low-rise housing coming through.

  2022.05.07

• A nation of apartment dwellers

  The Canada Mortgage and Housing Corporation (CMHC) recently published its latest data on housing starts, housing under construction, and housing completions. Here are a few of the highlights:

  • Canada saw 271k housing starts last year (2021). This includes single-detached housing and multiples, which captures semi-detached housing, row housing, and apartments (and other unit types). This is the highest number of annual housing starts that we have seen over the last five years. The range for the prior years has been between roughly 209-220k.
  • Ontario saw 100k (~37% of the country), Quebec saw 68k (~25% of the country), and British Columbia saw 48k (~18% of the country).
  • What I was curious about when I first saw these numbers was the split across the various housing types. Single-family homes, for instance, came in at 82k for all of Canada. So that’s about 30% of total housing starts. If you add in semi-detached and row, which I believe would also be all grade-related, you get to 124k or 46% of all housing starts.
  • Apartments and other unit types make up the balance at about 147k or 54% of all housing starts. This is kind of interesting because they now represent a majority.
  • Looking at Ontario, the percentage of apartments actually drops to 50%. But the numbers are much higher in both Quebec and BC at 69% and 63%, respectively. Again, this is kind of interesting.

  Despite all of our deference to single-family housing, the numbers suggest that we are actually in the midst of building a different kind of country — one that entails people living in “apartments and other unit types.” Maybe it’s time we got more granular with this line item.

  Note: CMHC defines “apartment and other unit types” to include not just apartments, but also stacked towns, duplexes, triplexes, double duplexes (whatever this is), and row duplexes. A number of these will, of course, be grade-related. But they still represent more intense forms of land use.

  2022.01.24

• Brampton is building a ton of secondary suites

  Here is an interesting housing chart from Ryerson University’s Centre for Urban Research (CUR) using data from CMHC:

  

  What it shows is (1) the number of new housing using created through the addition of secondary suites, such as basement apartments and laneway suites; (2) the number of housing units lost to demolition or “deconversions”, such as when a duplex or triplex gets converted (back) to a single-family home; and then (3) the net new units added over the last three years.

  In looking at the chart, you’ll see that the City of Toronto actually lost about 2,000 units from its existing housing stock between 2019 and 2021. Again, these numbers only consider what’s happening in the city’s existing low-rise residential housing stock. They don’t factor any of the housing supply being delivered through new condominiums and multi-family apartments.

  Still, it’s evidence for something that is perhaps already well known: many of Toronto’s low-rise neighborhoods are losing people. They are losing people because the existing structures are housing fewer residents and they are losing people because we make it difficult to build new housing. We want them to be “stable.” But stable built form doesn’t necessarily mean that things aren’t changing on the inside.

  Now compare this to what’s happening in Brampton (a suburb of Toronto). CUR is calling Brampton the land of secondary suites. Over the last three years, it added nearly 11,000 housing units and was on pace (at the time the data was published) to create nearly 6,000 last year alone (most of which are basement apartments). This is all within its existing housing stock.

  With all of this, I think there’s an interesting question about about how much of this is being driven by market demand and how much of this is being driven by land use policies. There’s obviously demand for expensive single-family homes in Toronto, which is why “deconversions” are happening. But to what extent does this change if/when we become more permissive around multi-unit dwellings?

  I think it depends on how we craft the policies.

  2022.01.14

• Apartment rents in Ottawa vs. Gatineau

  

  Ottawa, Ontario and Gatineau, Quebec are border cities. They exist on either sides of the Ottawa River. And yet, 2017 data from the Canada Mortgage and Housing Corporation revealed that there’s about a $450 per month rent spread on the average two-bedroom apartment in these two cities. The average rent on the Ontario side was $1,232 per month; whereas the average rent on the Quebec side was $782 per month.

  Now, Ottawa is bigger. The city has a population of about 934,243 (2016); whereas Gatineau is about 276,245 (2016). Ottawa is also the nation’s capital, and so the center of gravity is firmly toward the former. But the border is also very porous. Google Maps is telling me that you can walk from downtown Ottawa to downtown Hull (Gatineau) in 30 minutes. So why then is there such a rent disparity?

  Is there a language barrier? Is it because income taxes are higher in Quebec? Or is it something else? Interesting.

  Photo by Marc-Olivier Jodoin on Unsplash

  2019.09.19

• 2017 was a record year for housing starts in Canada, but…

  According to Bloomberg (using data from CMHC), 2017 was a surprising record year for housing starts in Canada: 219,675 units. This is the most since 2007 and is up from 197,916 units in 2016.

  The explanation: job growth (nearly 400,000 new jobs) and population growth were both more robust than expected.

  Multiple unit project starts are also up significantly with 142,840 units starting in 2017. This is a 15% increase from the prior year. Of these units, 102,516 of them were “apartment-like homes.”

  But all of this is nationwide data. Look at what happened in Toronto and Vancouver:

  The increased activity mostly sidestepped land-constrained Toronto and Vancouver, the country’s two most expensive markets, but was robust in the suburbs and less pricey surrounding cities. Starts in Toronto fell 1 percent to 38,738 in 2017, while declining 6 percent in Vancouver to 26,204 units.

  This is not because of a lack of demand. It’s becoming systematically more difficult and more costly to build new housing in these two markets.

  2018.01.10

• Supply, not foreigners

  The chief economist at the Canada Mortgage and Housing Corporation (CMHC), Bob Dugan, recently published a piece in Macleans called: why the foreign buyers tax isn’t making Vancouver more affordable.

  Here’s an excerpt:

  One year after the implementation of the foreign buyers tax, monthly sales to foreign investors now hover around 4 per cent of all sales. But our latest Housing Market Assessment, released in July, still shows a red flag for Vancouver—with particular concern given to overvaluation and price acceleration. Average prices in Vancouver have rebounded to where they were before the tax’s implementation. In between, there was a marked drop, but it appears to have been temporary. In short, Vancouver is largely right back to where it was before the tax.

  He goes on to argue that while there are many factors affecting home prices, “supply is by far the chief factor.” This, of course, is a refrain you hear from everyone in the real estate business, so I’m not going to belabor the point.

  But I would like to point out some of the percentages. 

  Before the tax, foreign sales in Vancouver (to buyers who do not have a permanent address in Canada) were thought to sit at roughly 10%. Immediately following the tax, when everyone was trying to assess the impact, this dropped to ~0.9%. And now it’s back up to somewhere around 4%, according to the article.

  Arguably, there has been a slight reduction. Though who knows how accurate these percentages are. There is now a strong incentive to hide foreignness. 

  Regardless, CMHC doesn’t believe it’s working.

  2017.08.21

• Why real estate is an imperfect market

  I’ve said many times before that the real estate market is an imperfect one. Participants lack access to a lot of valuable information and there’s a significant amount of friction between buyers and sellers.

  A perfect example of this can be found in this recent Toronto Star article, which is suggesting (at least in the headline) that only about 23% of Toronto’s condos are owned and rented out by investors. The article is reporting on the Canada Mortgage and Housing Corporation’s annual publication called the Canadian Housing Observer.

  Of course, to come up with this number, CMHC is only reporting on data held by the MLS. It does not include units that may have been rented out via Craigslist, Kijiji, social media, a billboard in the lobby, or some other means. And I would argue that the rental side of the marketplace has a much stronger tendency to go outside of MLS as compared to sales.

  So what what this means is that we have absolutely no idea what the actual percentage of investor owned units in the city really is. Here’s how CMHC put it:

  Mathieu Labarge, CMHC’s deputy chief economist, acknowledged that “to complete the picture there’s a need for data,” and it simply doesn’t exist.

  Nobody seems to know exactly where buyers, or their money, is coming from, why they are buying and how they intend to use the condo.

  In reality, the investor percentage is going to be higher:

  “We think the number is closer to 50 per cent,” says veteran Toronto development consultant Barry Lyon. “The data they (CMHC) are using has some shortcomings. It’s only part of the story.”

  Now, I don’t have the answer, but I think it’s pretty safe to say that consumers and the market as a whole would be better off if it had all the information.

  2013.12.23