Home Construction in Canada Booms

Canadian New Home Construction August 2016

New home construction activity in Canada continues to be one of the healthiest components of the national economy. Housing starts have defied predictions of a soft landing, and national housing starts throughout the first seven months of the year have trended around 200,000 annual units (chart 1).Canada National Housing Starts

The trend in building permits is only modestly lower at 190,000 units, pointing to continued strong activity over the remainder of the year. Housing starts are now expected to total approximately 195,000 units this year, very similar numbers to 2015.

British Columbia Leads

As with virtually all national economic indicators, there is a big and obvious regional divide in residential construction. British Columbia is the strongest province, with housing starts averaging a record-setting 44,000 annualized units this year, a 40% jump over 2015. While led by multi-unit construction (both condos and purpose-built rentals), single-family home construction also has picked up. B.C.’s residential construction boom extends beyond Vancouver and the Lower Mainland into other parts of the province, including Kelowna and Victoria. As of the date of this article, full impact of the new offshore resident tax, which was announced on July 25, has not yet been assessed.

Continued Strength in Ontario

Multi- and single-family construction also has picked up pace in Ontario this year. However, at an annualized 76,000 units year-to-date, the overall level of housing starts remains shy of a record. Activity remains extremely strong in Toronto, but a considerable amount of momentum has shifted to lower priced localities, including Hamilton, St. Catharines, Kitchener, Guelph, and London.

Alberta Home Construction Stabilizing

Construction activity in Alberta is showing early signs of stabilizing, although at levels well below historic averages. Provincial starts have totaled just 24,000 annualized units year-to-date, their lowest level since 2009, with notable pullbacks in both Calgary and Edmonton.

Activity in most other parts of the country remains relatively steady. There are signs of overbuilding in a few provincial markets, notably in Alberta, Saskatchewan and Newfoundland where home sales have slowed. For the most part, however, there is little evidence of any serious inventory problems.

Despite ongoing high levels of home construction activity, unsold housing inventory as a share of the adult population remains consistent with historical averages (chart 2).unsold Canada home constructionAbsorption rates of recently completed units remain healthy and stable. The continued strength in new and resale home prices is also indicating a lack of any glut in supply. Historic low borrowing costs, relatively healthy job market conditions and solid population gains
should continue to support housing demand and residential construction in B.C. and Ontario.

Builder Confidence

Builder confidence is being bolstered by strong resale and new home sales, tight supply and rising home prices. The average price of new single- and semi-detached homes has jumped 15% in Vancouver, and 8% in Toronto, over the past year. To the extent that tight supply is contributing to surging home prices in these two high-priced markets, the increase in new home construction is a welcome development. At the same time, rising unemployment,
inter-provincial population outflows, increased housing supply and a soft pricing environment weigh against a near-term recovery in Alberta, notwithstanding rebuilding activity related to the devastating May wildfires in the Fort McMurray area.

Canadian Housing Starts 2016

housing starts Canada 2016

with files from Scotiabank & CMHC

Pre-Delivery Inspection for New Condos

Pre-Delivery Inspection for New Condos: How PDIs work

new condo construction

Buying a new highrise condo can be one of the most exhilarating things that anyone can do. Nothing can top the excitement of watching it get built – first with excavation of the parking areas, then the steady climb where the podium and tower are built.  Finally the day comes – you are advised of a final occupancy date, and you are scheduled to do the pre-delivery inspection. So what it this?

New condo buyers conduct a pre-delivery inspection (PDI) of their new unit, accompanied by a representative of the builder, before they take possession. The builder is accompanies you through the inspection, and is there to answer any questions you may have, to make note of any deficiencies in your unit, and to demonstrate the various operating systems in the unit.

The PDI is a very important part of the new condo home buying process, as it is the last time you have to address any omissions or deficiencies that may have occurred during construction. All types of new construction in the province of Ontario are overseen by TARION, which provides certain warranties to protect the consumer, and you can find an extensive PDI checklist on their website. Here is also a short video on the subject, after which you can find our own checklist that applies strictly to condos.

PDI Inspection Checklist

Interior

  • Are there any dents or scratches in the walls, floor, ceiling?
  • Are there any nails or screws sticking out of the walls?
  • Were all of the lighting fixtures installed properly?
  • Are all the light switches in working order?
  • Do all the electrical outlets work?

Kitchen

  • does the faucet run both hot & cold water?
  • does the sink drain properly, and are there any leaks?-
  • do all the cupboards & drawers open & close properly?
  • were all the upgrades and options you selected installed?
  • are all the kitchen appliances in good working order, are there any scratches or dents?

Bathroom

  • are the faucets working properly – both hot & cold water?
  • does the tub drain properly?
  • are there any cracks or chips on the toilet?
  • does the toilet flush properly, and is it sealed properly to the floor?
  • is the bathroom fan working properly?
  • are the towel racks properly secured?

Exterior 

  • Are the balcony railings secure?
  • Is the balcony floor properly graded so that water will drain from it?

If you combine this checklist with the one on the TARION website, you will be sure to have a good understanding of the PDI process. If you notice any problems during the inspection, make sure that the builder acknowledges and commits in writing,  to fixing each problem. Once the PDI is completed and you’ve taken possession, you have only 30 days to report any other issues. After 30 days, the builder is no longer responsible for any problems that you may find.