398 Single Family Homes Started in Ontario in Feb. 1991
The last time single family detached housing starts were this low it was February 1991, interest rates were peaking in Canada at 16% and Ontario started 398 single family homes, a record low at the time.
Fast forward exactly 33 years and Ontario does it again — starting only 551 single family homes, but this time, there are 4.5 million more people to house.
Single Family Home Starts Down 72% From Peak Construction in Feb. 2003
When comparing February only data (to ensure seasonal consistency) we find that Ontario is building 72% fewer single family homes now, than it was in 2003.
This comes as governments push for more intensification and apartments built closer to transit.
Common reasons cited for the reduction in this type of construction include:
- The cost of land
- Higher building material prices
- A lack of buyers who can afford to purchase these homes
- High interest rates which reduce the amount buyers can qualify to borrow
- Government incentives to build near transit
The bottom line is that these type of homes are no longer where the profits are.
Apartments are the Future
When we look at apartment starts on the other hand, we get a different story, with construction surging over the last decade.
This chart really establishes the trend – over the last decade, constructors have opted to build apartment style condos. The law of supply and demand tells us that it because that is what their customers want (or can afford)
One Thing is for Certain, Were Entering a New Era
This transition from detached homeownership will have profound effects, and it begs many questions:
- Will Canadians choose to have kids if they’re stuffed into an apartment?
- Where will the carpenters, interlock driveway guys or landscapers work?
- Is anyone doing large renovations on their condo? Where does this leave the home renovation companies?
- What about dog ownership?
- Has anyone asked Gen Z if they wanted to live in an apartment?
These are all important questions that need to be carefully considered as we move to a future where apartments dominate.
