As soon as the Vancouver market settled down the Toronto market picked up where it left off; and it had many worrying that Toronto mortgages and Toronto homes were in a bubble that was about to burst. But it seemed the more people worried the busier Toronto mortgage brokers became, with new starts breaking ground every month, and more and more people out on the market buying homes. Now though, the pace may be slowing. Or at least according to CMHC, returning to normal.
New data was released on May starts in the Toronto area and it was found that the number of Toronto starts was down to 41,500 from 69,600 units in April. In order to gain a more accurate picture, CMHC used not only seasonally adjusted rates, which they use for many markets, but also the trending data, which is a moving average of the seasonally adjusted annual rates total starts in order to get a more accurate picture. Using both types of analytical data is essential in hot markets such as Toronto, especially when there is such a large gap from one month to the next.
Using both types of statistics is important, especially in an area such as Toronto. Because so many different factors influence housing starts throughout the city, sometimes comparing starts alone just isn’t enough. That’s the case in Toronto, as starts seem to be up even with the decrease in the seasonally adjusted annual rate. CMHC provided two such factors that have to be taken into consideration: new condo sales centre openings in 2011, and fewer resales.
In a statement released along with the data, Shaun Hildebrand, Senior Market Analyst for the GTA at CMHC said, “New home construction in Toronto returned to a more normal pace following a couple of exceptional months for condominium apartment starts. Housing starts have been elevated this year due to a large number of condo sales centre openings in 2011 and strong demand for new homes amidst relatively low resale listings.”
So is the Toronto market slowing, after months of bubble panic? Taking all factors into consideration, it doesn’t seem so. And even if the current rates and levels maintained their current positions, Toronto’s market still wouldn’t be slowing; rather just returning to normal levels after several months of being on a continual climb.