It seems that every time you open the newspaper (metaphorically speaking of course) there is another article warning of impending doom in Canada’s housing market. Sal Guatieri, Senior Economist at Bank of Montreal has released a short study on the issue. His findings mirror arguments we made not too long ago. Namely, that we are not building too many homes in Canada.
The number of homes we are building needs to be viewed against the backdrop of recent population growth. In 2014, we started about the same number of homes that we historically have, given the population growth (see chart below).
A perfectly valid question. It is true that some areas, such as Toronto, have seen an elevated level on condominium apartment construction. But there are a few important things to point out:
At the end of the day, real estate markets are local. As such, national averages are misleading as excess inventory in one market can hide a dearth of available stock in another. That being said, we view the Canadian housing market as generally healthy and providing the appropriate amount of new housing given demographic demands.