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BILD construction survey

Survey shows almost 500 projects delayed due to COVID-19

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Survey shows almost 500 projects delayed due to COVID-19

A majority of residential construction projects in the GTA have been delayed due the COVID-19 Pandemic, according to a survey from The Building Industry and Land Development Association (BILD).

BILD construction survey

The survey covered 498 active projects (276 in Toronto) representing 156,000 units at various stages of construction. These interruptions will have far reaching impacts on housing supply in an already tight market and will have negative financial impacts on government coffers.

The residential construction industry was granted essential workplace status under Ontario’s emergency orders during the COVID-19 pandemic. However, the industry was only able to complete homes that were near completion. Nevertheless, overall development and building projects across the region were delayed.

Slowed processing

“One might ask, if the building industry was granted essential workplace status, why are there new housing slowdowns,” says BILD President and CEO Dave Wilkes. “The response is a bit complicated. Disruptions to the supply chain negatively impacted the ability of the industry to secure vital building materials. Worksites had to appropriately adjust to COVID-19 protocols, as social distancing rules negatively impacted productivity and some municipalities had to adjust to working remotely. This slowed processing of planning and building applications and stalled developments and construction projects.”

The survey found that 65 per cent of projects in Toronto reported interruptions of three to six months, and 32 per cent were greater than six months. Eighty-three per cent of not yet above grade projects reported delays of three to six months, and 11 per cent are greater than six months. Eighty-five per cent of projects under construction permitted for above grade reported a delay of three to six months, and five per cent are greater than six months.

Significant losses

Altus Group estimates that these holdups will result in the loss of about 9,000 housing starts over the course of the next 18 months. This will set back occupancy of more than 8,000 units by the end of 2021, potentially exacerbating an already existing shortage of housing in Toronto, reduce construction activity and see the loss of 10,000 jobs per year.

“Now more than ever, all levels of government must work together to make sure that proper measures are in place to remove barriers that will unlock consumer and industry construction investments to help kick-start the economy,” adds Wilkes.


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A Return To Normal, It’s a great time to look for a new home

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A Return To Normal, It’s a great time to look for a new home

As has always been my intention for my contribution to this magazine, it is to tell the story from the sales floor. I am happy to report that after many months of slow sales in the lowrise sector, signs of life are appearing and we have seen some great openings throughout the GTA as 2018 came to a close. Markets like Brampton, Stouffville, Pickering and many other suburban communities have opened up with lineups and crowds ready and wanting to buy a new home.

Cachet Bradford
Cachet Bradford by Cachet Homes.

Sales in many of these new releases have done very well based on the absorption of the previous 12 months. What has also been nice to see, is that it is just not sales on entry level product such as townhomes and small singles, we have also seen the luxury market with homes in the multi-million dollar range selling again.

Norstar opening
October 2018 Norstar opening in Stouffville

Price levels have stabilized and purchasers are more confident that the new house market has corrected. What makes me most excited about the current state of the market is that we are seeing real people looking for a place to settle. Whether it’s to start or raise their families, people want to buy. The investors who fueled the crazy boom and sellouts in late 2016 and early 2017 have more or less disappeared.

This is not to say that lowrise preconstruction homes are not a great investment opportunity; I would say quite the opposite. With highrise preconstruction pricing hitting new heights with every new release. The continuing rental demand and pricing makes more sense in lowrise these days, certain pockets and products are a very smart place to invest these days.

I said in a previous article that pricing will not drop much lower and should increase based on the enormous costs involved with bringing a development to market and the costs of construction. A lot of the product on the market right now is being sold at a level that is below what it should be sold for; this is strictly to keep the engines moving in residential construction.

If you’re looking for a new home it is time to check out the new openings and existing communities and make that deal.

Elliott Taube is president of International Home Marketing Group, a full-service sales management and marketing firm. IHMG.ca

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