Canadian Housing Market Sees Surge in Construction Creating Challenges for Investors and Opportunities for Homebuyers
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Canadian housing markets are experiencing a surge in new housing construction, according to data from the Canada Mortgage and Housing Corporation (CMHC). In September, new housing starts increased by 8%, with a strong focus on multi-unit construction, which rose by 10%. This surge in construction is contributing to record-high inventory levels in some cities like Toronto and Montreal, which saw a 20% and 98% increase in housing stock, respectively. Even though construction activity is significantly higher compared to pre-pandemic periods, home prices in these markets are declining, with Toronto, Montreal, and Vancouver experiencing price drops of 1.3%, 0.6%, and 0.4%, respectively.
While the increased housing supply is beneficial for owner-occupiers, it may pose challenges for real estate investors as the high inventory levels could put downward pressure on home prices. Investors who entered the market due to low interest rates are now facing weaker demand, and the increasing competition from new housing stock could lead to a narrowing gap between current prices and what end users are willing to pay for properties. This trend could impact investor-owners of new supply negatively but could offer opportunities for potential homebuyers.
Read the full article on: REAL ESTATE MAGAZINE
