Condo construction jumped to a two and-a-half-year high in May, the country’s housing agency said Monday.
The number of home starts nationally accelerated last month to a seasonally adjusted rate of 201,705 units from 183,329 in April.
Canada Mortgage and Housing Corp. says the increase was primarily driven by multiple-unit projects in Ontario, the Atlantic region and Quebec.
“The Toronto condo sector drove the increase,” BMO economist Robert Kavcic said of Ontario’s numbers. It was one of the strongest months on record in May, Kavcic said.
“Keep in mind, however, that overall starts in the city ran well below household formation for the better part of 2014,” he said. “That said, starts clearly can’t keep running at May’s pace indefinitely.”
Condos are one area the CMHC has flagged in recent years as being susceptible to overbuilding. The housing agency said last fall developers should focus on selling units currently being built before starting construction on new ones.
Multi-unit starts, the term used by experts for condos and apartments, in urban areas accounted for most of the total number of annualized starts in May, or 122,367, an increase of 16.9 per cent from April. Construction of single-detached houses in urban areas was steady at a seasonally adjusted rate of 58,868 units.
In part reflecting the building boom in Toronto’s condo segment, the average price for a condominium in greater Toronto area hasn’t risen as sharply as other housing types in recent years.
Soaring values for detached properties has widened the gulf between the average price of a condo and other housing types to a record $222,800.