Undeterred by predictions of falling prices, home construction in Canada jumps to new high

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      Canada Mortgage and Housing Corporation said it more than once.

      Home prices will fall, according to the national housing agency.

      Developers and builders are unfazed.

      They’re building away.

      RBC Economics reports that new homebuilding in Canada grew again in July 2020.

      A total of 246,000 homes started construction last month, the “strongest” in two-and-a-half years, and 11 percent “above year-ago levels”.

      The report prepared by RBC economist Claire Fan came out Tuesday (August 11).

      Condos and other multi-unit homes led the growth in new home construction, accounting for 75 percent.

      Multi-unit starts totaled 184,000 in July 2020.

      New home construction in July 2020 surpassed the 212,000 housing starts in June.

      Homebuilding hit a low of 165,000 in April because of the COVID-19 pandemic.

      In a previous report, Fang noted that “even the lowpoint in April wasn’t as big a decline”.

      In May 2020, new home construction bounced back with 196,000 units.

      CMHC has been saying that average home prices will drop nine to 18 percent.

      In the August 11 report, Fang also noted that more and stronger homebuilding activity is expected in the coming period.

      Fang likewise reported that real estate boards in major urban centres like Vancouver, Toronto and Calgary are indicating sale increases in July.

      “There are still plenty of downside risks for the housing markets outlook,” Fang wrote.

      The RBC economist noted that “overall labour market is still weak”.

      Also, “lower immigration flows also mean less demand for new supply of housing”.

      “But, for now, both new building activity and home resales have shown stronger trends than feared,” Fang wrote.