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Toronto Market conditions

New construction indicates strong market to continue

When it comes to the real estate market, there’s always a great deal of media attention regarding the number of resale homes sold and the average house price in markets across Canada.  Certainly, those statistics give a good indication of where the market has been and where it is now.  However, one of the most interesting statistics to take into consideration is the total of national housing starts.  Since this information reports on new construction beginning, it provides an excellent glimpse of where home sales will be in the near future.

According to statistics recently released by Canada Mortgage and Housing Corporation (CMHC), the seasonally adjusted annual rate of housing starts was up in August to 226,500 units nationally.  That represents 10,900 units more than the 215,600 units reported in the previous month.  CMHC, Canada’s national housing authority, also confirms that this high rate of housing starts is a good indication of a continuing strong market in the months ahead.

This latest increase in national housing starts represents yet another consecutive month of well over 200,000 housing starts, a level of construction that hasn’t been seen in recent years.  That sustained near-record construction activity also indicates a continuing strong national housing market.  Yet despite this strong showing, CMHC predicts a gradual decrease in new homes construction between now and the end of 2008.  CMHC’s view that residential construction will decrease gradually between now and the end of 2008 mirrors a similar forecast by the Canadian Real Estate Association (CREA) for the resale market.
So keep an eye on new construction sales to start to drop off before the end of next year.  That could be your first alert that the market is making an adjustment and starting to moderate.

Want more information about market trends and forecasts in your local community?  Contact me at http://www.epsteinrealestate.com and take advantage of my helpful advice.

Published Sunday, December 30, 2007 10:08 PM by Jordan Epstein

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