Happy Monday Morning!
We’ve talked a lot about immigration. Remember, the Feds targeted 430,000 permanent residents in 2022 and hit those with ease. Those targets have been set even higher moving forward. However, the real issue here is these figures do not include non-permanent residents. It seems strange to omit these people considering the fact that once you factor them into the calculations our population actually ballooned by a million people in 2022.
This is either incompetence or a total blind spot at the federal level. It’s something I discussed this past week on our podcast with former Conservative leader Erin O’Toole.
It gets more complicated when you consider its actually the responsibility of provincial and municipal governments to approve new housing supply. Suffice to say getting three large bureaucratic governments on the same page is like running a marathon with a pebble in your shoe.
If you manage to limbo through all the red tape, congrats. Your next challenge is eating a doubling in financing costs, volatile and rising construction costs, and a never ending increase in development charges. In fact, CMHC just pumped their development fees by 100-200% on their rental construction financing program.
It’s no wonder housing starts are going down for the dirtnap. The seasonally adjusted annual rate of housing starts in March came in at 213K units, the lowest level since the depths of the pandemic.
I have a funny feeling we’ll still be talking about a housing crisis five years from now.
In other news, the resale market has caught fire, a theme we’ve been talking about for a little bit now. I suppose a twenty year low in new listings will do that. If you’re planning on attending an open house anytime soon make sure you bring an old pair of shoes because you’ll probably lose them in the pile at the door.
I don’t know why things have changed so dramatically in just a couple of months, but they have, and it’s not just in Vancouver. My good friend Jordon Scrinko runs a massive pre-sale business in the GTA. I promise you he’s not just pumping his bags. The investors are back.
Maybe Tiff needs to raise rates again. Who knows, but sentiment has definitely shifted. Some things are hard to explain, like when people were losing their jobs at the onset of the pandemic but also bidding up housing. It’s like we’ve come full circle again.