Hey there, trendsetters! 🌟 Ready for the latest scoop on the Canadian housing market? We've got the lowdown on what's happening with home construction, straight from an October 5, 2023 article in Canadian Mortgage Trends magazine. 📰

Construction Blues 🏠 In the first half of 2023, the Canadian housing market witnessed a 25% drop in the construction of new single-detached houses compared to last year. That's a significant slowdown, folks! According to the Canada Mortgage and Housing Corporation (CMHC), this translated to 9,523 fewer single-detached units being built in the country's six largest Census Metropolitan Areas (CMAs).

📉 What's causing this construction slump, you ask? Well, high interest rates, limited access to credit, and skyrocketing construction and labor costs have made life tough for homebuilders all over Canada. 🏗️ Fewer projects are getting off the ground, and those that do are taking longer to complete, with construction timelines up by 0.9 months.

The City Factor 🌆 Toronto and Vancouver, being the behemoths they are, accounted for nearly two-thirds of housing starts in these six metro areas. However, it's essential to note that larger buildings in these cities require more preparation time, which means the numbers you see today are a result of favorable conditions that existed when these projects were initially planned.

Variations Galore 🌎 The pace of new construction varied across different cities. While Vancouver, Toronto, and Calgary were experiencing growth above the levels of the past five years, Montreal, Edmonton, and Ottawa saw housing starts on the decline.

Montreal, in particular, had a whopping 58% year-over-year decrease in housing starts in the first half of 2023. On the flip side, Vancouver and Toronto saw increases of 49% and 32%, respectively.

CMHC attributes Montreal's decline to shorter construction periods due to a higher proportion of low-rise and smaller structures. In Toronto, the more extended planning and construction time for apartment projects meant that many of these projects were financed during the more favorable conditions of 2022.

CMHC's Outlook 🧐 So, what's the outlook for the Canadian housing market? CMHC predicts that economic challenges, like high interest rates, will slow down apartment starts in Toronto and Vancouver by the second half of the year. However, they expect things to return to 2022 levels eventually.

With soaring home prices and interest rates, along with record-high immigration levels, rental demand remains strong. But guess what? The demand for rental housing is expected to surpass the available supply of purpose-built rentals.

To sum it up, folks, while some cities are booming, the overall construction activity still isn't enough to tackle Canada's affordability and housing supply crisis in the long run. We need some serious boosts in the construction industry's productivity to address this challenge.

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