August Sees a Boost in Toronto Housing Starts
So itís nearing the final days of summer and everything seems to be cooling down: the weather, the vacation time and of course the housing market.
September 14th 2012, Toronto, Ontario, Canada
So itís nearing the final days of summer and everything seems to be cooling down: †the weather, the vacation time and of course the housing market.† At least, thatís what we expect from the seasonal dance of our housing market, but a new report shows that housing starts, mainly in the Toronto market, actually increased in the month of August.† This was mainly due to large multi-unit projects such as condominiums being developed late in the season. Believe it or not, there were actually close to 20,000 housing starts in August, which balloons the seasonally adjusted pace from 200,000, up to nearly 225,000 units.
So what is causing this late summer surge and what does it mean for a new mortgage or mortgage refinancing?† According to most analysts, it is directly connected with a large amount of pre-sales within the Toronto condo market.† As for British Columbia, Nova Scotia, New Brunswick and PEI, the recent surge in August is more of a reflection on the slow month of July and the market starting to balance out in August.
There are, however, a few warnings about this type of growth.† Some analysts believe that the Canadian economy is currently growing too slowly to sustain this level of housing starts.† In addition to this, the new mortgage rules that took effect in July are expected to stem the growth of housing starts further, with low interest rates keeping the market healthy for the time being. Once, interest rates inevitably begin to rise, we can expect a significant drop in house sales and possibly a correction on housing prices throughout the country.
In addition to overall housing starts seeing an increase, it should be noted that urban single starts have stayed fairly steady in August at nearly 64,000 units, while multiple starts increased to 15.5%, up to nearly 142,000 units.
Homebase Mortgages is a leading Toronto mortgage broker, which specializes in all types of mortgages ranging from home equity loans, second mortgages, private mortgages, mortgage refinancing, home mortgages and hard money lending.
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