We are constructing more houses – and costs are falling!
On Monday, Canadian Mortgage and Housing Corporation The variety of announced housing starts rose from 241,111 units in April to 264,506 units in May: a rise of 10%. The pace was fastest in Montreal, where housing starts increased by 104%, and Toronto saw a notable increase of 47%. That’s a fairly good number considering how high rates of interest are straight away.
While it will be statistically accurate to say that the variety of housing starts is near an all-time high, that doesn’t tell the entire story.
To get a more accurate historical perspective, let us take a look at the variety of housing starts per capita over time. After all, Canada’s larger population should mean more capital, carpenters, electricians and other aspects of production going into housing, right?
Maybe we’re moving in the proper direction, but we want a major increase in housing starts before we reach the identical proportionate housing construction levels as we saw within the heyday of the Nineteen Seventies. Many young Canadians hope recent government incentives will result in more housing development sooner fairly than later.
Although the provision of residential properties is increasing, high rates of interest appear to proceed to influence the present market. This week Canadian Real Estate Association released data showing that total home sales in Canada fell by almost 6% in May year-over-year. The average home price fell to $699,117, 4% lower than in May 2023 and about 14.4% from its peak in February 2022.
While the small rate cut earlier this month could also be creating renewed appetite within the housing market, it’s notable that the variety of newly listed properties is up 28.4% in comparison with the identical period last 12 months. As increasingly more mortgages come up for renewal, it’s going to be interesting to see which force is stronger: increasing demand as a result of falling mortgage rates or the continued weakening of the market as more individuals are forced to list homes they’ll not afford (plus more recent units are added).
What does the common Canadian buy?
Every month Statistics Canada produces an inflation report based on the Consumer Price Index (CPI), a representative “basket of goods and services” in eight categories (food, housing, transportation, etc.) whose prices are tracked over time. Most of us simply accept that the CPI is a very good measure, while others think it’s unrealisticThis week, the Consumer Price Index (CPI) received its annual update after the team at Statistics Canada examined how average consumer preferences have modified over the past 12 months.
The CPI cannot stay the identical from 12 months to 12 months because our purchasing habits change significantly over time. So it makes little sense to measure inflation using the very same goods from years ago. For example, once I was a child, CDs and video cassettes were a part of the CPI basket of products – today they probably aren’t. Here are a number of the more notable changes:
