Restrictions were lifted on the province?s new home construction sites by mid-May, but with groundbreakings pushed back and project timelines stretched, Ontario is still set to see an overall decline in housing starts this year.
That?s according to Central 1 Credit Union?s Ontario Regional Economist Edgard Navarrete, who, in a research note published last week, projected that housing starts in the province would fall by one percent in 2020 compared to 2019 levels. This would amount to 68,300 new home units beginning construction across the province in this calendar year.
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That isn?t half bad considering the restrictions on home building in place only a few months ago. And, thankfully, that?s about as grim as the picture will get provided a stronger second wave of COVID-19 infections doesn?t force the economy back into ?hibernation,? wrote Navarrete. Toronto home sales post best-ever total for August
By 2021, housing starts in the province should begin climbing back up, with the economist predicting an eight percent increase that year, or 73,800 units starting construction. Navarrete said that multi-residential starts (in other words, condos, townhomes and semis) would see a stronger uptick, rising 10.1 percent, compared to single-detached homes which he expects to experience a 2.6 percent increase in starts. Toronto condo rental listings jumped by 45% last quarter: Zoocasa
Despite the relatively rosy outlook barring a significant COVID resurgence, there will be challenges for home builders in the coming months.
?[T]he pandemic has changed building sites for the foreseeable future until a vaccine or treatment becomes widely available. To protect the public health, fewer workers are allowed on job sites and this has significantly slowed progress,? wrote Navarrete. RE/MAX boosts 2020 home price projections as market rebounds
He cited data on longer project completion timelines due to pandemic impacts, noting the average amount of time to complete a housing project has jumped to 19.9 months, up nearly 25 percent compared to reported completion times in 2019.
?Moving forward, with the pandemic-effect fully baked-in time to complete projects will only increase as sites have to be vigilant of following stricter public health measures,? Navarrete wrote. Canada?s housing market seeing V-shaped recovery: TD
That said, home builders should be heartened to see demand rising as the gradual economic recovery takes shape through 2021. Navarrete wrote that first-time homebuyers are expected to zero in on multi-residential developments ? including townhomes and semi-detached homes ? in the periphery of larger markets. Canadian Real Estate Association says home sales hit record high in July