The Canada Mortgage and Housing Corporation (CMHC) has recently reported that the six-month trend in housing starts rose by 1.1% in February, reaching 239,382 units. The trend represents a six-month average of the seasonally adjusted annual rate (SAAR) of total housing starts across Canada.
A “housing start” is technically defined as the beginning of construction on a new residential building, including single-detached homes, semi-detached homes, townhouses, and apartment/condo buildings.
As an explanation, the CMHC’s estimate is of how many housing starts would occur over a full year if the current monthly pace continued, while also accounting for seasonal patterns, for example, fewer new starts during the winter (for obvious reasons). In addition, instead of looking at just one month’s SAAR, the 1.1% number comes from the CMHA evening out short-term fluctuations by averaging the last six months.
So, although numbers appear to be up, they are actually down in a few key areas, with Calgary being a glaring exception. The total monthly SAAR of housing starts for all areas in Canada decreased 4% in February (229,030 units), as compared to January (239,322 units). In centres with populations of 10,000 or more, housing starts dropped by 17%, with 14,459 units recorded in February as compared to 17,454 in February 2024.
Montreal saw a 6% year-over-year increase in housing starts, with gains in both multi-unit and single-detached homes. Vancouver experienced a 48% decline in starts. And Toronto recorded a massive 68% drop from February 2024, with declines in both multi-unit and single-detached segments.
As an exception, Calgary recorded 2,407 housing starts last month, up from 1,629 (33%) in January and 1,674 in February 2024 (31%). In contrast, Alberta’s three other major cities — Edmonton, Lethbridge, and Red Deer — saw a decline in housing starts. Edmonton reported 1,478 housing starts in February, down from 1,642 in the same month last year, a decline of 10%.
What do high housing starts mean for condo owners?
High housing starts in Calgary can have several implications for all property owners, depending on market conditions and other economic factors.
Increased competition
A surge in new housing starts — especially in the condo and multi-unit sector — can lead to more supply in the market. Calgary is looking at a massive triple-tower development in the downtown core that will add about 300 rental units and 700 condominiums for sale once complete. This is shortly after a 36-storey building has just gone up across the street, and with many others planned.
For condo owners already in the area, the question is whether the mass development downtown will affect their property values. As single family homes remain the most attractive and desirable types of real estate available in the city, and development of that kind taking much longer, if demand doesn’t keep pace, this could increase competition for sellers and landlords, potentially softening resale prices and rental rates.
Potential impact on property values
If new developments flood the market and there are no buyers available to scoop them up, existing condo values may experience slower appreciation or even a dip, particularly for older units that lack modern amenities. Many condo owners who saw a massive appreciation in their property values last year may see those valuations go down this year, which means different things for different people. If you are looking to sell, it’s not good news. If you are looking to stay, it will likely lead to lower property tax assessments and a little more money in your pocket.
More rental options for tenants
For condo owners who rent out their units, more housing supply could mean increased competition from new rental properties, possibly making it harder to attract tenants or maintain high rental rates, especially if they are new, shiny, and have added amenities. On the other hand, if population growth and demand remain high, rental prices could stay stable. Calgary’s population growth projections remain high, with estimates projecting the city’s population will reach approximately 1,688,000 this year, a 1.38% increase from 2024.
Market stability and long-term growth
A rise in housing starts shows confidence in Calgary’s real estate market and economy. If new developments align with demand, the city’s housing sector could remain balanced, benefiting condo owners in the long run.
Infrastructure and community growth
Despite how it seems, with roads shutting down seemingly endlessly, businesses suffering due to lack of accessibility, and the changing face of communities, more housing starts often lead to increased infrastructure investments, improved amenities, and expanded public services. These can all enhance the desirability of certain neighbourhoods and positively impact condo values over time.
Always make sure you are covered
If the value of your condo has risen substantially since your date of purchase, or if it has dropped, both situations are a great opportunity to revisit your condo insurance. If something happens, you don’t want to discover that your limits don’t cover the amount needed to pay for damages and repairs, and you also don’t want to be paying for more than you need.
In addition to your basic condo insurance package, we also recommend coverage for additional living expenses should the worst happen, such as your residence becoming uninhabitable following a covered loss.
Also, don’t forget that as of 2020 all condo owners require deductible insurance along with their condo insurance. Since then, condominium corporations are allowed to require owners to pay the entire building’s deductible amount for claims where the damage can be proven to have originated in a suite or a private area, such as a storage unit or an owned parking spot. This means that for an incident such as a toilet leaking in your unit that causes damage to the building’s structure or to another unit, or for a fire that starts on your balcony and spreads, regardless of whether you were negligent you will more than likely be on the hook to cover up to a maximum of $50,000 for your condominium corporation’s insurance deductible. This is why coverage is mandatory.
Low condo insurance rates from Lane’s of Alberta
At Lane’s Insurance, we know that most condo owners are very responsible and are entitled to the protection their policies provide. How we differ from the others, however, is that as brokers we have the ability to shop for your policy for you, compare rates and coverages, and obtain the very best policy for you. In addition, we are always willing to help explain the parameters of your policy at any time and gauge if you still have the coverage you need.
If you have any questions about your condo insurance, or would like to inquire about your options, contact us at our Calgary, Banff, Edmonton, or greater Alberta offices to see what we can do for you.
