New condos oakville . Canada is now in the process of population growth. Each person builds 18 houses.
In the past, Canadian housing construction lagged behind, but now it has far exceeded population growth. Last year, housing construction began to outpace population growth, according to CMHC. By the fourth quarter, each person with a growing population had now completed 18 houses. Oddly enough, house prices have been soaring.
Canadian real estate developers are busy providing large amounts of supply. By the fourth quarter of 2020, 50938 houses had been completed, down 11.2 per cent from the previous quarter. Despite minor setbacks, new housing completion has increased by more than 12.9% over the same period last year. Developers are busy, from labor to wood shortages. This is the largest Q4 completion since 2018. Before that, Q4 had not been completed so much since 2008.
The pace of population growth is hardly the same as the pace of construction. In the fourth quarter of 2020, Canada’s population grew by 2767, down 89.1% from the previous quarter. Compared with the same period last year, it decreased by 98.7%. The lack of immigration is the main reason for the sharp decline in this number.
The trend of higher and higher per capita completion has just reached a level rarely seen beyond the overhang. This ratio calculates an increase of 18.4 households per person. It is about seven times that of the previous quarter, and this is already a sizeable 2 houses per person. In terms of background, the average family size in Canada is 2.9. In an optimistic situation, the current annual completion is greater than the average growth of the target family. To say the least, this is. A large supply.
We have been told that as more houses are delivered, or even prices are reduced, prices should slow down. Now, we are seeing that home delivery far exceeds the household structure, but price growth is accelerating.
No wonder the Bank of Canada has begun to say it has nothing to do with supply. Now, the government says that housing can afford the income of foreigners, but it is not very big for Canadians, which also makes a lot of sense. When the border reopens, investors may wait for large amounts of inventory to be sold.