TD Economics Report Feb 8, 2017

TD Economics brought to you by Dina Ignjatovic, Economist


Data Release: Housing starts kick off the year on strong footing


  • Canadian housing starts kicked off the year on a strong note, with homebuilders breaking ground on 207k units (annualized) in January.  This extends December's sharp gain, and pushes the 6-month moving average up just shy of the 200k unit mark.


  • The strength in January stemmed from the multi-family sector, which was up 4.2% following a 14% gain in December.  Meanwhile, single family construction was down 4.6% on the month, reversing some of December's gains.


  • Regionally, Ontario remained the key driver of growth, with starts up by a whopping 25% in January.  Homebuilding in the Atlantic Provinces was also up during the month while the remaining regions recorded declines.  B.C. experienced the largest pullback, as home starts slid 33% from the month prior.


Key Implications


  • Overall, housing starts have been hovering around the 200k mark annualized (on a trend basis) for the last six quarters, or just slightly above the current rate of household formation.  However, homebuilding construction should begin to slow over the course of the year, consistent with a cooling in overall housing market activity.


  • Still, the recent strength in multi-unit projects could have further room to run given the surge in building permit approvals seen over the second half of last year. This could be partly offset by single-family construction, which is already at relatively lofty levels.


  • The regional story will continue to reverberate across the housing markets, with central Canada leading the way, while B.C. and the oil-rich provinces lagging behind.



Two Mortgages to help you build your Dream home- Military Mortgage Inc
 April 26 2016     Posted by Jennifer Gaudet


Build It! Two mortgages to help you build your dream home

Money when it’s done: The Completion Mortgage. Just like it sounds, this is for situations when you don’t need to actually come up with full funding until the home is complete and move-in ready. You’ll need to provide a downpayment when you make an offer to purchase the planned home,and then the mortgage you are approved for is advanced to the builder at possession. This is a single advance mortgage and is the same as a regular residential mortgage.

Money as you build: The Progress Draw Mortgage.  This type of mortgage will give you funds at specific intervals as the house is built. Generally, you’ll need to provide a progress report and have an inspection in order to secure the next “draw” of funds. While the number of draws can vary, it is common to have three draws: one at rough-in, one at completion, and a final draw when you take possession of the home.  Once the home is completed, the mortgage will be converted to a conventional home mortgage.  Keep in mind that you will need to pay for the progress inspections, and interest payments may be payable or accrue. Funds are released to the builder through your lawyer. 

Be prepared for your big build adventure!

As with any mortgage, you’ll need to complete a mortgage application, and your lender will be reviewing your credit and income. While you are waiting for your home to be built, make sure you don’t make any big changes to your financial situation: no big purchases, for example. In fact, it’s best to take on NO new debt. Until the home is in your name – and your mortgage is complete – you’ll want to hold the line on debt, and ensure your employment is stable (this isn’t a good time to switch jobs).  

Dream on.

Building a new home is an exciting project. Come in to speak with us as early as possible in the process. We’ll outline all of the documentation you need to obtain your construction mortgage, and then get the process started in an efficient and stress-free manner.  And then… dream on!

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