By Tom Parkin
December 20th, 2024
BURLINGTON, ON
Strong housing starts in BC, Alberta, Quebec while Ontario continues to stall
Canadian housing starts were up 30 per cent between this November and November 2023 on big gains in BC, Alberta and Quebec, according to data released by CMHC on Monday.
But not Ontario, where November housing starts were lower than a year ago. At 5,506 unit starts, results were a tiny improvement over the terrible results of the previous three months.
With a population of 16 million, Ontario last month had fewer housing starts than Quebec, population nine million. Quebec workers started constructing 5,660 units last month.
BC and Alberta were close behind, at 4,048 and 4,983 starts respectively. BC has a population of 5.7 million; Alberta’s population is 5.0 million.
A monthly building effort the size of BC, Alberta or Quebec transposed onto Ontario would deliver more than 12,500 starts, a monthly target set by the PCs’ Housing Affordability Task Force report.
But the Ford PCs’ actual effort hit just 44 per cent of that target last month. They’ve failed to hit their target in 30 of the 30 months since their 2022 election pledge to hit them.
Despite recent price drops, Ontario remains expensive
In the four years from Doug Ford’s June 2018 election until the Ontario price peak, the average house price rose 72 per cent in Toronto and 94 per cent in Hamilton.
The price crash since February 2022 has lowered house purchase prices by 19 and 23 per cent, respectively. But the damage has been deep. Many are left holding big mortgages about to renew at higher rates. And with mortgage rates well above pre-peak levels, the costs of ownership may only be cheaper for those coming with lots of cash.
And while apartment asking rents have also peaked, many Ontarians are remain stuck in high rent payments. Others are stuck in long commutes or housing that doesn’t fit their situation because their current place is rent control protected but a new place is not.
High costs, lagging wages taking toll on economy
High costs,combined with Ontario’s lagging wages, leaves less income for other purchasing, and appears to be dragging down the province’s economy.
Most recent data shows Ontario retail sales are lower than February 2022 while the rest of Canada reached record highs. Consumer spending usually powers about two thirds of GDP.
Ontario’s jobless rate rose dramatically last month while falling in most other provinces. Toronto unemployment hit 8.1 per cent; in Windsor it’s 8.9 per cent. Bankruptcies are increasing faster in Ontario than in any other province.
Ontario’s housing experience shows the economic damage that comes with letting housing inflation run rampant, even long after the boom has turned to bust.
I am with you Graham!
Maybe there is more pushback in Ontario against super high rises adding to congestion and strain on infrastructure.Perhaps more growth in the “Wide open spaces” in the west is a good thing in the long run for Canada.