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CMHC Report on Housing
Housing Market Outlook 2020 New report from CMHC forecasts large falls in housing starts and sales across Canada
As the health, social and economic impacts of COVID-19 continue to be felt around the world, declines in employment, incomes and migration are putting unprecedented stresses on financial markets. CMHC’s latest Housing Market Outlook, released May 27th, 2020, looks at the potential ranges for housing starts, sales and prices across Canada until the end of the forecast horizon in 2022.
Although there is still great uncertainty surrounding the potential severity and duration of the pandemic, CMHC speculates that Canada could see historic declines in output, employment and immigration exceeding those observed during the recession of 2008-2009. In turn, these declines could drive large falls in housing starts and sales throughout 2020 and beyond. Meanwhile, in the oil-producing provinces of Alberta, Saskatchewan and (to a lesser extent) Newfoundland & Labrador, the downturn in economic and housing activity could be aggravated.
“Following large declines in 2020, housing starts, sales and prices are expected to start to recover by mid-2021 as pandemic containment measures are lifted and economic conditions gradually improve,” said Bob Dugan, Chief Economist. “Sales and prices are likely to remain below their preCOVID-19 levels by the end of our forecast horizon in 2022. The precise timing and speed of the recovery is highly uncertain because the virus’s future path is not yet known.”
Unfortunately, a more severe and sustained recession could also emerge if the pandemic were not contained, delaying recovery. The high uncertainty regarding the path of the pandemic is reflected in CHMC’s wider forecast ranges, with provincial forecasts subject to similar variability — although Alberta and Saskatchewan are likely to experience more prolonged downturns due to the additional negative impacts on output and employment from lower oil prices.
Construction activity
The speed with which construction activity could return to pre-COVID-19 levels will depend on the ability of the building industry to adapt to distancing protocols and other
Lease Activity in the GTA What the data tells us Since the start of the COVID-19 period economic uncertainty stemming from the (March 16, 2020), there was a clear shift in onset of COVID-19, with renters less willing leasing activity in the GTA, with Urbanation or able to take on a new lease at current citing a decline of 25 per cent compared rents, as well as the closing of Canadian to the same period a year ago, and 39 per borders and the logistical challenges with cent compared to the first half of March. showing units and planning for a move. According to Urbanation, the decline in “As rental demand declines as job rental transactions can clearly be related to losses mount, incomes are reduced, and the impact of the protective measures and immigration shrinks, the slowing in the GTA rental market that appeared in the last half of March will progress for at least the next few quarters given the current economic outlook,” said Shaun Hildebrand, President of Urbanation. “The impact on rents will be something to watch, which will also be influenced by the timing of the record number of units that were expected to complete this year.”
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containment measures. In addition, uncertainty regarding the course of the pandemic situation could adversely impact the confidence of builders and homebuyers in future economic growth, thus further delaying recovery compared to past downturns.
Housing starts will likely see a decline of 51 per cent to 75 per cent in 2020 from preCOVID-19 levels before starting to recover by the second half of 2021. Housing starts are not expected to rebound to pre-COVID-19 levels by the end of the forecast.
Housing starts: April & May
CMHC’s monthly Starts and Completions Survey (SCS) for April was conducted in each province except for Quebec, due to pandemic measures that were introduced there in late March. Residential construction in Quebec resumed on April 20, and data was included in May’s SCS.
The trend in total housing starts for May was 196,750 units, down from 198,644 units in April. Excluding Quebec, the trend was 151,072 units in May, down from 155,600 units in April. This trend measure is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts.
“Outside of Quebec, the national trend in housing starts decreased in May,” said Bob Dugan. “Higher multifamily starts in Ontario and the Atlantic provinces were offset by declines in British Columbia and the Prairies. We expect national starts to continue to register declines in the near term, reflecting the impact of COVID-19 measures.”
As Canada’s authority on housing, CMHC contributes to the stability of the housing market and financial system, provides support for Canadians in housing need, and offers objective housing research and information to Canadian governments, consumers and the housing industry.
Worksite Safety Amid COVID-19
Tips for multi-residential operators undergoing construction projects
Resilience and innovation have always been central to the building industry. However, due to the increased restrictions and challenges associated with COVID-19, the additional processes and measures required to keep people safe have hurled the sector into unprecedented territory.
Jordan Swail, Project Engineer with RJC Engineers (RJC), has spent years dedicated to the restoration of existing buildings. His most recent projects include window, roof, and wall repair projects on large residential buildings. According to Swail, preventative measures required due to COVID-19 have become a significant issue, particularly for residential building projects, given the much higher occupancy levels, and challenges of physical distancing when residents are staying at home.
To help address these and other concerns about worksite safety amid COVID-19, Swail offers the following advice:
1.PLACE BARRIERS AROUND WORK ZONES IN OCCUPIED SUITES
For properties undergoing intensive work, particularly at occupied suites, construction of temporary work enclosures can allow contractor staff to maintain physical distancing from residents. Modular hoarding products or sealed poly tarps can be installed quickly and provide safe and sealed airtight enclosures. Designated access paths to and from the worksite further reduce touchpoints and keep interactions with occupants at a minimum.
“A physical barrier can provide peace of mind to residents who are having their suite accessed by workers, and reduce the potential for conflicts with access requests,” he said.
2. SEPARATE WORKERS FROM OCCUPANTS IN SHARED SPACES
In larger multi-residential buildings, addressing the use and access of workers through shared spaces or common areas is an important part of reducing the risk of infection. By requesting workers to limit elevator use to specific blocks of time, placing them on service, and thoroughly cleaning after, the likelihood of residents and workers encountering one another is significantly reduced. Usage times should be scheduled in advance so residents can anticipate the inconvenience. Hand washing and hand sanitizing stations in common areas, as well as the requirement for personal protective equipment, will further reduce transmission.
“Elevators and lobbies are high risk areas where residents may not follow physical distancing guidelines,” warned Swail. “Separating time of use can reduce the risk of infection.”
3. UPDATE CONTRACTS TO INCLUDE COVID-19 REQUIREMENTS
Most pre-existing construction contracts don’t address the current COVID-19 crisis, which has resulted in contractors relying on Ministry of Labour guidance and government regulations. To protect building occupants, owners, and allow a higher standard of care, Swail advises that specific COVID-19 measures be worked into contracts for any upcoming work.
“With COVID-19 impacts anticipated well into 2021, we highly recommend adapting new contracts to address additional scheduling, access, and PPE requirements,” he said. “The ideal time to implement these changes is before the contract is signed.”
4. ESTABLISH SPECIFIC BLOCKS OF TIME FOR NOISY WORK
With a larger majority of people now working from home, noisy work has a higher potential for disruptions. Setting a proactive noisy work schedule – for example, two hours in the morning and two hours in the afternoon – and communicating that schedule to residents through the building management, will allow them to book their meetings accordingly, and ensure some degree of peace is maintained.
“Typical noisy hours of 8:00am to 5:00pm are no longer convenient with more residents likely working from home,” Swail said. “Limiting noisy work hours, or phasing it across different portions of the building, can go a long way to reduce complaints.”
To find out more about worksite safety measures during COVID-19, please reach out to Jordan Swail at jswail@rjc.ca or visit www.rjc.ca.
