Housing Starts Remained Strong in September

[MADEinHK]

Housing Starts Remained Strong in SeptemberOTTAWA, October 8, 2008 — The seasonally adjusted annual rate1 of housing starts was 217,600 units in September, up slightly from 217,400 units in August, according to Canada Mortgage and Housing Corporation (CMHC).

“Housing starts remained at a high level in September, with construction activity again staying above the 200,000 unit threshold.†said Bob Dugan, Chief Economist at CMHC’s Market Analysis Centre. “Higher starts of multiple family homes were behind the rise in new home construction activity in September.â€

The seasonally adjusted annual rate of urban starts rose 0.1 per cent in September, compared to August. Urban multiples rose in September by 5.5 per cent to 122,500 units. Urban single starts decreased 8.1 per cent to 70,000 units in September compared to August.


September’s seasonally adjusted annual rate of urban starts went up or remained unchanged in all regions of Canada, except Ontario, where housing starts decreased by 6.6 per cent to 80,900 units. Urban starts increased to 9,500 units in Atlantic Canada, 29,000 units in the Prairies, and 33,600 units in British Columbia. In the Quebec region, starts remained stable at 39,500 units. Multiple urban starts increased in all regions in September, with the exception of Ontario, where they decreased by 1.9 per cent.

Rural starts were estimated at a seasonally adjusted annual rate of 25,100 units in September2.

For the first nine months of 2008, actual starts in rural and urban areas combined were down an estimated 5.7 per cent, compared to the same period last year. Year-to-date actual starts in urban areas have decreased by an estimated 0.8 per cent over the same period in 2007. Actual urban single starts for the January to September period of this year were 15.6 per cent lower than they were a year earlier, while urban multiple starts were up by 12.2 per cent over the same period.


http://www.cmhc-schl.gc.ca/en/corp/nero/nere/2008/2008-10-08-0815.cfm

 

[cdr108]

“Higher starts of multiple family homes were behind the rise in new home construction activity in September.â€

Housing starts is a lagging indicator considering the sales were pre-construction from 12-18 months ago when economic conditions were dramatically different.

 

[lowesthangingfruit]

“Higher starts of multiple family homes were behind the rise in new home construction activity in September.â€

Housing starts is a lagging indicator considering the sales were pre-construction from 12-18 months ago when economic conditions were dramatically different.

That multiple units spike makes me kinda nervous. That would imply more supply coming on stream when demand may be waning and even if you just attended one class of economics 101,....you know what happens next.

 

[cdr108]

That multiple units spike makes me kinda nervous. That would imply more supply coming on stream when demand may be waning and even if you just attended one class of economics 101,....you know what happens next.

That should be a major concern for anyone in the condo market especially if one purchased within the last 2 years or put less than 20% down payment.
Currently condos make up more than 50% of the market and in the late 80s/early 90s it was substantially less ~30%.

I was at a presentation last night where Jane Renwick of Urbanation was a guest speaker. According to her, average Toronto index price is $461 psf compared to Toronto Census Metropolitan Area (CMA, which stretches from Burlington to Whitby) average index price of $396 psf.

Canada's biggest city has become North America's biggest condo market, with more units now under development than Manhattan, Chicago and Los Angeles.

I am kind of hopeful that some Toronto projects get slowed or cancelled, because that ultimately will lower the supply side of the equation and not make the lowered demand feel worse; thereby adding further pressure on prices to go down.

 

[cabbagetowner]

I am kind of hopeful that some Toronto projects get slowed or cancelled, because that ultimately will lower the supply side of the equation and not make the lowered demand feel worse; thereby adding further pressure on prices to go down.

i wouldn't be surprised if a large number never break ground. everything's all tightened up. almost impossible to get money.

 

[condoboy]

That should be a major concern for anyone in the condo market especially if one purchased within the last 2 years or put less than 20% down payment.
Currently condos make up more than 50% of the market and in the late 80s/early 90s it was substantially less ~30%.

I was at a presentation last night where Jane Renwick of Urbanation was a guest speaker. According to her, average Toronto index price is $461 psf compared to Toronto Census Metropolitan Area (CMA, which stretches from Burlington to Whitby) average index price of $396 psf.

Canada's biggest city has become North America's biggest condo market, with more units now under development than Manhattan, Chicago and Los Angeles.

I am kind of hopeful that some Toronto projects get slowed or cancelled, because that ultimately will lower the supply side of the equation and not make the lowered demand feel worse; thereby adding further pressure on prices to go down.

Cdr...for your information, condo sales have surpassed conventional home sales for the first time ever in Toronto this year. This is simply because people in the last several years have been choosing the condo life style over the white picket fences and the cookie cutter homes in the burbs.

Secondly...I find it ironic that you are hoping projects get cancelled or slowed down at a time when people need to be working and people are worried about their jobs. Do you think that's the answer? Put more people out of work, that's going to help???

It's not about supply and demand yet....people are still buying condos in the city. You are going to have to wait a while to find a bargain in this city!

 

[Uncle Teddy]

Uncle Teddy just finished selling his last City Place unit. Had 2 at HVE (sold a year ago) and 1 in W1 (sold a little while ago) and 1 at N1 (closing next week). All did well. Time to take the cash and start buying stocks.

 

[condoboy]

Uncle Teddy just finished selling his last City Place unit. Had 2 at HVE (sold a year ago) and 1 in W1 (sold a little while ago) and 1 at N1 (closing next week). All did well. Time to take the cash and start buying stocks.

Way to go Teddy...congrats! And they say the condo market is crashing...who were the buyers if you don't mind me asking - younger, older, singles, couples?

 

[lowesthangingfruit]

Way to go Teddy...congrats! And they say the condo market is crashing...who were the buyers if you don't mind me asking - younger, older, singles, couples?

I think what Teddy is implying is that he is bearish on the TO condo market and starting to warm up to the equity markets.

If Teddy is indeed a well seasoned real estate investor that has been through and seen many market cycles, we should listen to what he has to say.

So spill the beans Teddy, r u the veteran RE guru that I think you might be ??

 

[condoboy]

I think what Teddy is implying is that he is bearish on the TO condo market and starting to warm up to the equity markets.

If Teddy is indeed a well seasoned real estate investor that has been through and seen many market cycles, we should listen to what he has to say.

So spill the beans Teddy, r u the veteran RE guru that I think you might be ??

It sounds like your fruit is not hanging so low...but a little more aaah...green with envy

 

[Uncle Teddy]

Not a veteran real estate person by any means. But I saw the value at City Place. $160,000 and $170,000 at HVE pre-built turned into $245,000 and $250,000 built within 4 years. Same with W1 and N1.

Not sure where the market is going but the panic on the stock markets looks to be a better place to be than in a market that's still pumping out units full scale while the financials are drying up.

The Canadian banks are falling, stock price wise, even though they most likely won't get seriously hit. And there's plenty of companies on the market that are doing great that are getting hit hard stock price wise.

I'm planning on buying Apple once I close on the last condo. Down almost half recently even though they are increasing sales by 30% a year. I doubt we'll find sub prime mortgages on their balance sheet.

 

[lowesthangingfruit]

It sounds like your fruit is not hanging so low...but a little more aaah...green with envy

No, not envious of Teddy, but I do respect anyone that was able to make good coin and make good market calls.

 

[lowesthangingfruit]

Not a veteran real estate person by any means. But I saw the value at City Place. $160,000 and $170,000 at HVE pre-built turned into $245,000 and $250,000 built within 4 years. Same with W1 and N1.

Not sure where the market is going but the panic on the stock markets looks to be a better place to be than in a market that's still pumping out units full scale while the financials are drying up.

The Canadian banks are falling, stock price wise, even though they most likely won't get seriously hit. And there's plenty of companies on the market that are doing great that are getting hit hard stock price wise.

I'm planning on buying Apple once I close on the last condo. Down almost half recently even though they are increasing sales by 30% a year. I doubt we'll find sub prime mortgages on their balance sheet.

Congrats Teddy. Good call. Like I said I respect anyone that can make good coin and pull the trigger to do so.

Apple probably wouldn't be the first on my buy list,....but who knows, I am getting slaughtered just like everyone else.

 

[cdr108]

Cdr...for your information, condo sales have surpassed conventional home sales for the first time ever in Toronto this year. This is simply because people in the last several years have been choosing the condo life style over the white picket fences and the cookie cutter homes in the burbs.

Secondly...I find it ironic that you are hoping projects get cancelled or slowed down at a time when people need to be working and people are worried about their jobs. Do you think that's the answer? Put more people out of work, that's going to help???

It's not about supply and demand yet....people are still buying condos in the city. You are going to have to wait a while to find a bargain in this city!

Seriously, tell us the truth - you're not a realtor or work for a developer ?!?!?!

If it's not about supply/demand, then why is the industry always quoting that for the increasing prices (ie. low supply, high demand) ???
It's ALWAYS about supply/demand (and a good dose of market manipulation with secretive bidding wars)!

Secondly, YES, I do want projects to be slowed or cancelled.
WHY, because:
1 - the boom has resulted in increased costs from land aquisition to labour;
2 - a labour shortage for trades which results in increased in delays for completions;
3 - as people in the industry say "it was a boom year for 2007 so a slowdown to the norm is healthy".

 

[lowesthangingfruit]

It's not about supply and demand yet....people are still buying condos in the city. You are going to have to wait a while to find a bargain in this city!

Not about supply and demand ?? I just don't get it then.

Remember condoboy,....real estate,....especially condos are a COMMODITY (which alot of ppl forget, but at the end of the day, it is simply that, a commodity to get consumed). Just as with any commodities, there is always a supply and demand fundamental. This S/D fundamental can and will get distorted at times for various factors, but at the end of the day, there is always a reversion to the mean which will be based on the basic S/D fundamentals.

By the way, what do you mean ppl have to "wait" to find a bargain ??
Just to be perfectly clear, I was under the impression that you feel the TO market will weather the storm and only have "moderate" appreciation or flattening while the rest of the world drops like a stone and then when the rest of the world recovers, TO for some reason will outpace other parts of the world ?? Wasn't that your opinion and outlook ?? If so, why "wait", why not just buy now before TO "catches up" ?