Unsurprisingly, recent high interest rates have put a real dent in Canada's new housing starts. In a new bulletin, Canada Mortgage and Housing Corpor…
In a new bulletin, Canada Mortgage and Housing Corporation estimates higher interest rates decreased new home construction by about 30,000 units in 2023, which is roughly equivalent to a drop of 10 per cent to 15 per cent of the annual total that would otherwise be expected — based on the annual average of about 250,000 units.total number
But unsecured market rental housing supply — specifically strata market ownership condominiums that are rented out by their individual owners, who are often investors — also accounts for a very significant portion of the overall rental housing supply, especially in the key urban markets of Metro Vancouver and Greater Toronto. With such condominium projects stalling, this source of new rental housing supply is almost stagnant.
In essence, condominium housing starts are sensitive to interest rates that homebuyers face, while rental housing starts are sensitive to interest rates that corporate investors face. "Small investors provide much of the funding to build condo apartments. Developers raise funds from prospective buyers who may occupy those units or rent them out.
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