Developers Cautious Due To High Interest Rates

Gains in new housing construction in Toronto, ON; and Calgary and Edmonton, AB; were offset by declines in Vancouver, BC; Montreal, QC; and Ottawa, ON, says Canada Mortgage and Housing Corporation's (CMHC) ‘Housing Supply Report.’ After a boom recorded in 2021, housing starts in the country's six largest census metropolitan areas (CMAs) fell five per cent in the first half of 2022, with a nine per cent decrease in apartment construction in Vancouver the main cause of this drop.  In the first half of 2022, housing starts were mixed across Canada's largest urban centres. Rental construction was generally resilient, due to strong demand for this type of housing, while developers took a more cautious approach to starting new condominium apartment projects, due to the higher interest-rate environment. Increases in construction costs and materials shortages were also felt across markets, impacting construction times and the affordability of the housing delivered.