After a banner year in 2016, housing construction in the London area got off to a flying start in January thanks to a spike in multi-family units.
Canada Mortgage and Housing Corp. (CMHC) said there were 522 housing starts last month, compared to 112 in January 2016.
All of the improvement was in the volatile multi-family sector. There were 461 starts last month compared to just 33 in the same month last year.
“A large number of apartment starts in January pushed up the trend measure to an unusually high level. New condominium apartments are being built in response to the shortage of homes listed for sale in the $250,000 to $350,000 price range, while new rental apartments are being built in response to London’s lowest vacancy rate since 2003,” said Anthony Passarelli, a CMHC market analyst.
The number of single-family homes was down, with 61 starts last month compared to 79 in January 2016.
Trevor McKenzie, president of the London Home Builders’ Association, said the 23 per cent decline in single-family starts in January is not significant. He said builders may have been discouraged by predictions of a harsh winter that turned out to be inaccurate.
“I don’t think it’s a factor of the market, it’s a factor of weather,” said McKenzie, who expects single-family starts will improve in February.
The CMHC statistics includes London, St. Thomas, Strathroy and surrounding rural municipalities.
The hot real estate market contributing to the surge in home starts shows no signs of cooling.
The London St. Thomas Association of Realtors (LSTAR) said 574 homes sold in January, the highest total for the normally slow month since the association began tracking data in 1978. Last month’s sales were up 26 per cent from January 2016.
Don Kerr, a professor at King’s University College, said the 2016 census released this week showed the number of private dwellings in London increased by 6.2 per cent since 2011, higher than the population increase of 4.8 per cent and the provincial average increase of private dwellings of 5.8 per cent.
Kerr said the boost in dwellings may be due to smaller households with more empty nesters and singles living in homes.
Via Ifpress. View full article here.
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