On August 22, Canadian Home Builder’s Association (CHBA) rolled out its Housing Marketing Index (HMI) for Q2 of 2024. The result: Worse than expected. Builder sentiment across the country remained even lower than in Q1 2024. More than half of the developers saw their housing starts drop by over 50% in Q2.
CHBA’s HMI “assesses current selling conditions, expectations for selling conditions over the next six months, and the level of sales office traffic”.
HMI for single-family builders stood at 29.9 (out of 100) recording a difference of 10 points year-over-year. The multi-family HMI saw an 8.5 points year-over-year drop to 32.5.
High population, low affordability in areas such as Ontario and BC recorded figures that were even worse. Ontario got a score of 11.6 for both single- and multi-family developers, on the other hand, BC stood at the single-family HMI of 17.8 and the multi-family HMI of 32.5. In short, HMI has remained low across the board.
According to the report, “48% of HMI respondents stated that they are building fewer units than they otherwise would have as a result of challenges with mortgage qualifications for their customers, and 22% have stated that lack of sales has led to the cancellation of projects. Overall, 61% of respondents expect to have an average of half the number of starts this year compared to 2023.”
Reflecting on the sluggish market, Kevin Lee, Chief Executive Officer of the CHBA said, ”The slowly dropping interest rate environment is not enough to counter the restrictive mortgage rules contributing to buyers’ inability to enter the market with today’s house prices… Canada continues to need both more supply and changes to mortgage rules to help drive the construction of that supply.”
