After a winter drought in apartment construction, new home construction in the London area got a big boost in April.
Red-hot April boosts local home construction sector
The Canada Mortgage and Housing Corporation (CMHC) reports there were 367 housing starts in London-St. Thomas last month, up from 174 in the same month last year and the highest total for the month since 1989.
The biggest factor was a revival in the multi-family sector with 147 apartment units and 64 rowhouses. But single-family starts were also strong, with 154 units last month compared to 136 in April 2017.
CMHC analyst Andrew Scott said it was the first significant upturn in London area housing starts in five months.
Although down from last year’s peak, he said overall housing starts are still relatively strong, because of the steep drop in listings in the resale market that’s pushing more buyers into the new home market.
“Strong spillover demand from a tight resale market has kept construction robust,” Scott said.
After a record year in 2017, overall housing starts were down substantially in the first quarter of this year because no large apartment projects got underway, although a number are in the planning stages.
Single-family starts, a more reliable market indicator, are in good shape with 446 units this year, compared to 431 last year.
But even with the April boost, multi-family starts are still lagging well behind 2017.
As a result, there have only been 710 overall housing starts so far this year, compared to 1,148 in the first four months of 2017.
Across Canada, the estimated annualized number of housing starts dipped to 214,400 in April, after a strong two-month run.
In Ontario, the estimated annual starts fell to 70,000 in April, down from 74,900 the previous month.
BMO economist Robert Kavcic said overall housing starts in Ontario and British Columbia are still close to peak levels and could soon spike again.
“The supply is getting gobbled up, with high-rise inventories in Toronto, for example, probing cycle lows,” said Kavcic.
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