Canada’s construction sector showed strong results in 2021, reducing pressure on the real estate market
It looks like builders in Canada are reducing some pressure from the tight real estate market, reporting the strongest performance of new construction since the 1970s.
According to the Canada Mortgage and Housing Corp., the work on 271,198 homes was started in 2021, marking the largest number since 1976 and the second most since 1955. The construction of 222,670 units was completed, which is the best result since 1979.
Such a performance shows that developers are trying to benefit from Canada’s housing market that’s seen average home prices go up by almost 30% annually because of restrained supply, with the fewest existing properties listed for sale in at least 25 years.
“These starts are expected to be completed over the coming quarters, and that should provide at least some supply relief for the extremely tight real estate market,” – Andrew Grantham, an economist at CIBC, believes.
The gains were reported in the new construction of both single-detached and multiple-unit properties. Developers began work on 82,116 single-detached houses in 2021, rising from 59,954 seen in 2020 and marking the highest number since 2012. At the same time, the construction of the main segment was still below historical averages.
The starts of multiple-unit properties reached a record high level of 189,082 units last year.
However, the last month of the year saw a slowdown, as builders began work on an annualized 236,106 units in December, falling by 22% from November’s 303,813 units.