Real Estate News

Challenges Loom for Canadian Housing HMI Highlights Urgent Need for Policy Changes in 2024


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The Canadian Home Builders’ Association (CHBA) Housing Market Index (HMI) reveals a concerning outlook for the country's housing industry. Despite the increasing demand for housing to accommodate Canadians, builders are growing apprehensive about the existing industry conditions.The HMI underscores the need for a policy and financial systems change in Canada to facilitate increased housing supply. The report warns that housing starts in 2024 are likely to decline without significant interventions, citing a record-high 28.5% surge in mortgage interest costs in 2023, which has negatively impacted the residential construction sector sensitive to interest rate fluctuations.

The HMI has reached an unprecedented low, with single-family builder sentiment at 24.6 and the multi-family HMI at 29.1. The data indicates that 64% of builders constructed fewer homes in 2023 due to soaring interest rates, and 30% had to cancel projects. Concerns about further declines in housing starts persist, with 36% of builders anticipating even fewer starts in 2024. Higher construction costs, exacerbated by material price hikes, have become a new normal for consumers. Despite lumber prices stabilizing, other materials continue to rise, contributing to an average increase of $65,000 in the cost of a 2,400-square-foot home compared to pre-pandemic levels.

Read the full article on: REAL ESTATE MAGAZINE


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Amandeep Singh
Amandeep Singh
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