The Canada Mortgage and Housing Corporation (CMHC) released a new report discussing the rate of housing starts and resales in the Greater Toronto Area (GTA) in 2010.
Year over year, there were 13 per cent more construction starts in 2010 than the previous year, with the first half of the year moving upwards to combat the lows of early 2009 and the second half of 2010 moderating to a Q4 level of about 5 per cent less than the second quarter's post-recession seasonally adjusted annual rate (SAAR) of housing starts peak of 31,000. This rate is still low in comparison with the average rate of the previous decade, which was 25 per cent higher.
Diminishing supply of development-ready lots, a small inventory of single detached houses and subsequent low sales in 2010 are accounted for a significant decline in the SAAR of housing starts of this type. The GTA inventory of single detached lots ready for development has been about 5,000, which is approximately half of its volume recorded five years ago.
On the other hand, the resale market trended higher in the last quarter of 2010 at 85,000 seasonally-adjusted resale transactions, which was a 15 per cent rise from the third quarter. The total dollar volume of the housing resale market reached a record high in 2010 with $38 billion, which was up 6 per cent from the previous all time high in 2007. A 9 per cent increase in average selling prices contributed largely to this feat.