The Canadian condo sector has been hit severely by the global financial plight, far more harshly than other sectors of real estate in the country. While we have experienced an rising number of house starts in rural areas, and a healthy, continuous increase in the building of single occupancy houses, there has been a marked fall in the number of starts of condominiums and apartments in areas all around Canada like  downtown Toronto condos. 

There was an overall decline of 1.5 percent, during March, in the number of real estate starts, largely as a result of the decline in multiple family building construction. This was the first time that there had been a decline in housing starts in 2010. There was a growth of 7.5 percent during January and 6 percent in February. March experienced 197,300 home starts, compared with January’s 189,000 and February’s 200,400. 

The decrease in housing starts has been greatest in the major cities of the country. Some rural areas have proceeded to experience an increase in building, even as the national average has fallen over into a descent. House starts in urban parts declined by 4.2% in March, as starts in rural areas rose from 17,600 in February to 22,100. It is the transition in construction of multiple occupancy dwellings, which are largely built in urban centers, that has had an substantial effect on these numbers. Rural properties tend to be single family houses. 

There was an increase during March in the number of starts for single occupancy buildings, of 6.9 percent, while starts of multiple unit buildings dropped by 15.2 percent during the same month. March marked the eleventh month in a row that single residence starts had grown, bringing them from their lowest level of the economic downturn, in the preceding April, to the best they have been over the past four years. 

There has been an important decline in multiple residency real estate construction in the Toronto area over a few consecutive months, with a marked drop in interest in building high rise apartment blocks and Toronto condominiums. Toronto is typical of the national picture, however, since this drop in multiple occupancy units was paired with an increase in the amount of starts for single occupancy low rise buildings and rows.

Shaun Hildebrand, the Canada Mortgage and Housing Corporation expert in market examination for the Toronto area communicated an opinion that things would change in the near future. The climbing demand for less costly kinds of housing in the local area will probably translate in the building of more condominiums, he said. 

Starts of multiple occupancy buildings do tend to fluctuate more uncontrollably than those of single family houses, with changes happening far more quickly. Bob Dugan, chief market analysis economist for the CMHC (Canada Mortgage and Housing Corporation) believes the market for condos in Canada to be a volatile one. 

The significant decline in starts of multiple unit buildings in March followed a fall of 0.5% in building permits in February, that was largely due to a decrease in requests for permission to construct new apartments and condominiums.