We heard from CIBC World Markets Deputy Chief Economist Benjamin Tal that he’s keeping an eye on Europe, China and the U.S. What happens out there, will affect what happens at home, he told the group of about 350 BILD members.
While the U.S. housing market is not a normal-functioning housing market, it is showing some positive signs of buyer traffic, he told us. Most of the traffic has been generated by investors because there is a strong demand for rental homes. Interestingly, more than 300,000 renovation jobs were logged getting those homes ready to rent out so far this year.
Buyers here at home are watching the interest rates and Tal said they could go up next year or early 2014, but it won’t be a shock to the system. He anticipates the industry will use discipline and self-regulate, taking the next year to find a new equilibrium.
In the latest new home sales figures, released earlier this week, the changes to lending rules by the federal government in the summer have diminished consumer confidence in the GTA. Anticipating the changes, the industry launched fewer projects over the summer and therefore, September new home sales are lower than they have been in years past.
The good news is that so far this year, from January to September, a total of 26,392 new homes have been sold across the GTA.
Looking at the housing cycle, Altus Group Chief Economist Peter Norman forecast that we are on track to start construction on more than 45,000 homes across the GTA this year — which is on par with the peak year of 1987.
The homes under construction now across the GTA were previously sold, some a few years ago when the projects first launched, and the sales that we are seeing today will materialize into newly-constructed home in the coming years. Norman anticipates 38,600 homes to be under construction next year and 36,400 in 2014.
This industry has stood the test of time and I think it was fitting that on the same day we discussed our future, we took a moment to celebrate our past.
This year, our association recognized members that have reached their 25-year and 50-year milestone as important contributors to fabric of the GTA. Congratulations to the 15 member companies we inducted into the BILD Quarter Century Club and special congratulations to the three member companies we inducted into our Half-Century Club — Tridel Corporation, The Rockport Group and Teskey Concrete Company Limited.
– Bryan Tuckey is President and CEO of the Building Industry and Land Development Association (BILD) and can be found on Twitter (twitter.com/bildgta), Facebook (facebook.com/bildgta), Youtube (youtube.com/bildgta) and BILD’s official online blog (bildblogs.ca).