When it comes to home building, Toronto will mount a stronger recovery than other parts of the province in 2021 and 2022 after taking a hit this year.
The prediction from the Canada Mortgage and Housing Corporation (CMHC) comes as Toronto entered stage two of Ontario’s reopening plan this week.
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The agency said that housing starts will drop in Toronto through 2020 as supply chains and available labour are severely impacted by the COVID-19 pandemic. The city and its surrounding metro region will then see a rebound in housing starts in 2021, one that CMHC Senior Specialist Dana Senagama said will look slightly stronger than the rest of Ontario’s thanks to Toronto’s “more robust and diverse economy.”
Housing starts measure how many homes began construction during a given period and are generally viewed as a key factor in determining market health.
The CMHC, a Crown corporation and the country’s public mortgage insurer, published a special edition of its Housing Market Outlook this week that contained a large set of forecasts for Canada’s major housing markets up to 2022.
The possible low point of Senagama’s 2020 housing starts forecast in the Toronto region sees the seasonally adjusted annual rate of starts falling below 10,000 units, before steadily recovering back up to a potential high point of approximately 40,000 units by 2022. The rate would then stabilize in the 30,000 units range moving forward.
In recent years, the seasonally adjusted annual rate for housing starts in the Toronto region hit a high of 50,000 units in 2018 before dropping to the mid-20,000 to 30,000 range in 2019. A decline like the one Senagama is forecasting for 2020 would amount to a significant reduction in future housing supply were it to stretch over a long period. However, as per her forecast, the homebuilding rebound should arrive relatively swiftly.
Earlier this week, the Building Industry and Land Development Association published survey results that showed 498 new home projects in the Toronto region had faced various types of construction delays since the pandemic began.