London area housing starts triple in August, third best in province

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The number of housing starts in the London area more than tripled in August compared to the same month last year, an indication economic conditions are on the upswing, both the mayor and an organization representing builders say.

Construction began last month on 470 units in the London census metropolitan area (CMA), which includes St. Thomas, Strathroy-Caradoc and parts of Elgin and Middlesex counties, compared to 151 in August of 2023, Canada Mortgage and Housing Corp. (CMHC) says.

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The 211 per cent increase is the third highest in Ontario behind Oshawa and Peterborough. The London area bucks both provincial and national trends for housing starts that are on par or below 2023 levels.

“This confirms what we already knew was starting to happen, and that’s the starts are actually accelerating in our city and that 2024 is going to be a good year,” London Mayor Josh Morgan said. “There were certainly a lot of economic headwinds (in 2023) that were holding things back. What council did was it continued to push along with permissions, assessing applications and preparing ourselves very well for when the economic condition shifted.”

Morgan was happy most of the new starts were types of housing other than single family homes but will ease pressures on the city in terms of water, sewer and road networks. Single-family homes will not only meet a huge demand for affordability, he said.

Not surprisingly, the increased housing starts coincide with the Bank of Canada’s decision to start cutting interest rates. Morgan hopes interest rate cuts will continue, providing relief to Londoners with variable rate mortgages.

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While he knew the London area would have strong numbers, Morgan was surprised the city was a leader in the province and the country.

“I’m very proud of it, I will say, but it’s not something I was expecting when I saw the numbers,” he said. “But I also think that we’ve set a directionality, and we set a clear course to say we’re not gonna sit back in our chairs and say, ‘I hope things get better.’”

Ontario’s housing targets, which allow cities to tap into $1.2 billion in funding for water, sewer and road infrastructure to further spur home building, are based on the same CMHC housing starts data.

As of July, London broke ground on 1,864 homes, less than half of its 2024 target of 3,917 units, but already more than in all of 2023 at 1,804 units.

London missed its 2023 housing target of 3,447 units and therefore its share of funding, but Queen’s Park recently awarded the city nearly $24 million from a different infrastructure fund to upgrade its downtown sewer system, adding more capacity that equals serving an additional 17,500 homes.

Premier Doug Ford complimented the city for the number of council approvals and building permits, something Morgan said he re-emphasized in a recent call following the new CMHC numbers.

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Jared Zaifman, chief of the London Home Builders’ Association, said the August numbers were positive, especially after a tough 2023 for the development community.

He said he agrees higher density housing, including rentals, meets increased demand. But Zaifman said he hopes the turning economic tide could fuel the market for single family homes, row housing and townhomes that are easier to build, further adding to housing starts.

“We’re going to be seeing a lot more of that next year, and in the years to come,” he said. “It’s overall very, very positive, but definitely still some room for improvement and growth.”

Zaifman credits council’s deluge of approvals, particularly on apartments, for creating a steady pipeline of projects for London to draw on as its population continues to boom.

He also believes London is a leader in the province, both through emphasizing purpose-built rentals, and co-operation between council and the development industry to improve its planning and building department.

“I think we’ve been fortunate to have a council that is forward looking . . . and an industry that can really directly respond to those needs and those demands,” Zaifman said.

jmoulton@postmedia.com
@jackmoulton65

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