London’s housing starts broke through the 3,000 mark in 2016 for the first time in almost a decade.
The Canada Mortgage and Housing Corporation (CMHC) says there were 193 housing starts in December, compared to 100 the same month last year. The December starts pushed the annual total to 3,116.
The last time the London area had more than 3,000 housing starts was in 2007, before the major recession in 2008.
CMHC analyst Anthony Passarelli said the low vacancy rate was a factor in the surge in housing starts for London-St. Thomas. The rate fell to 2.1 per cent, the lowest rate since 2003.
The decline in vacancy was partly attributed to the influx of about 2,000 Syrian refugees to the city this year.
Passarelli noted there were 1,238 apartment starts this year, more than double the number in 2015.
“About two of every three apartment starts in 2016 were intended for the rental market, as builders responded to low vacancy rates. Strong apartment and single-detached starts helped push total housing starts above 3,000 units,” said Passarelli.
A hot real estate market is also getting some of the credit for the surge in home starts.
The London St. Thomas Association of Realtors (LSTAR) said 502 homes sold in December, bringing the total for 2016 to a record 10,193, up 8.8 per cent from 2015.
Trevor McKenzie, president of the London Home Builders’ Association said resale homes are now in a sellers’ market with a shrinking number of listings.
He said resale home buyers are getting caught in multiple-offer situations and are looking at new homes as an option.
He said a growing number of buyers from the Greater Toronto Area are boosting sales of both new and existing homes.
London is an attractive alternative, with Toronto house prices jumping another 20 per cent in the past year, he said. The average price of a detached home in Toronto is $1.3 million, compared to $303,675 in London.
Across Canada, the CMHC said the number of annualized housing starts jumped to 207,000 annualized units in December, up from 187,300 in November. Most of the increase was due to starts in Ontario.