In the spring of 2017, buyers were scrambling to buy single-detached homes. But since then, sales of single-detached homes have been moving steadily downward.
A report from the Canada Mortgage and Housing Corporation (CMHC) predicts that low-rise housing starts will decline from 75,900 in 2017 to between 66,200 and 68,400 starts in 2018, and between 66,100 to 68,900 in 2019.
The reasons for the seemingly sudden drop in development?
Prices are just too high. In Canada’s hottest markets, the price of a low-rise home is still prohibitively high for most buyers, often well over a million dollars. While for years the dream of homeownership meant a low-rise home with a yard for the kids, many families are coming to terms with the fact that it might be outside their budget.
There aren’t enough to go around. If low-rise construction starts begin to falter, as predicted by the CMHC, prices will only balloon higher. In the second quarter of 2017, the number of completed and unsold low-rise homes nationally per 10,000 people was 4.2 units—the lowest level in six years.
Condos are becoming more socially acceptable. Given the lack of supply and high prices, more and more buyers are considering condos for their homeownership needs. According to Statistics Canada, only 35 per cent of 30-year-olds lived in single-detached homes in 2016, compared to 44.4 per cent in 1981. And almost 13.3 per cent or 1.9 million households were condos in 2016.