With another Bank of Canada announcement coming next week (July 24), the impact of high interest rates continues to slow the housing industry. Investors or contractors have little interest in starting when they don’t know what the end game will be.
Will there be buyers? At what price? At what cost? The higher interest rates are discouraging some of the very people who can have an impact on housing starts, the independent and missing middle buyers.
Will there be some positive indications when the Bank announces if there’s going to be a change to the interest rate. Many analysts are thinking it will be cut, for the second time in six weeks, but perhaps only by .25 per cent as it was at the beginning of June.
In the meantime, housing starts are slumping.
Across the country, the total monthly seasonally adjusted annual rate was down nine per cent in June. The total number of housing starts dropped dramatically in Vancouver — 55 per cent — and of Canada’s three major metropolitan centres, only Toronto was down more (60 per cent.)
The monthly statistics — from Canada Mortgage and Housing — show that multi-unit construction is most responsible. In Montreal, on the other hand, apartment construction is up 63 per cent over 2023’s eight-year low. In Calgary and Edmonton, housing starts in all dwelling types rose 38 and 67 per cent, respectively. That balanced the stats for what was happening in Toronto and Vancouver.
The actual number of homes under construction in B.C. last month was 3,343 — most of them (2,376) apartments. In June 2024, that total was 5,375. The Vancouver figures were similar — 579 new housing starts last month, 804 in June 2023.
How much will that change with the July 24 announcement from the “big bank?”