Surging demand heightens supply concerns
The London region homebuilding sector is on track for yet another record-breaking year as industry continues to call for governments to pave the way for a boost to supply
THE LONDON AREA new home market continues to post very strong numbers, with 1,899 housing starts recording so far in 2021, up from 1,145 in the same period in 2020.
The gain represents a 66 per cent increase in housing starts, which is even more significant given that last year saw the highest number of housing starts in the last decade, putting the industry on pace for another record setting year.
The significant increase is largely attributed to growth in the single-detached and apartment segment, with 790 single-detached starts which outpaces the 10-year average of 370. In addition, the Canada Mortgage and Housing Corporation says there is significant interest in single-detached homes in London and area “owing to a surge in demand for more spacious homes since the pandemic.”
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“The newly released housing starts statistics continue to show that demand for housing in the region isn’t going anywhere,” says Jared Zaifman, CEO of the London Home Builders’ Association. “As buyers from across Ontario and Canada continue to see London as an affordable option as well as strong and growing interest from Londoners looking to become homeowners, we expect to see demand continue to grow and it is vital that we work to ensure we have a consistent supply to meet the consistently growing demand.”
The London CMA achieved two other historical records in April, including breaking ground on 755 homes, the second highest total for a single month in London and the highest on record for the month of April, and beginning construction on 277 single-detached homes, the highest on record for the month of April.
“We expect to see demand continue to grow and it is vital that we work to ensure we have a consistent supply to meet the consistently growing demand” ―Jared Zaifman
According to the just-released Ontario Real Estate Association’s 2021 Home Buyers and Sellers Report, nearly one-in-five (19 per cent) Ontarians say they plan to buy a home in the next 12 months, a level that was seen one month before the pandemic.
“In the last year, the desire among buyers for detached homes has grown stronger, but unfortunately, seller intentions for such properties have receded, so inventory is not keeping up with demand, making it tougher for buyers to find a great place to call home,” says OREA president, David Oikle. “The current situation we’re facing in Ontario – increasing prices, demand for more space and larger homes – all during a once-in-a-century pandemic, points to a much larger systemic issue facing Ontario’s home buyers: a serious lack of housing supply.”
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“For some Ontarians, the pandemic has led to increased savings or a shift to remote work, but has also accelerated major life decisions. For many, that has meant buying a home that accommodates their new space needs,” adds OREA CEO, Tim Hudak. “As more Ontarians continue to adjust to new remote work lifestyles, Ontario’s Realtors are calling on Government to boost supply, ensuring future generations have the same opportunity to become homeowners their parents did.”
The OREA report also stresses that housing is a spectrum issue and requires a broad approach from all levels of government, and recommends that meaningful short-term action and long-term solutions are needed to increase housing supply across Ontario, such as intensification along transit lines, improvements to the planning approvals process, and innovative housing solutions. 