More than 60% of Canadian builders expect their housing starts to drop by half in 2024, according to a recent survey by the Canadian Home Builders’ Association (CHBA). This significant decline in new construction is largely attributed to rising costs, higher interest rates, and stricter regulations, which have made it increasingly difficult for builders to maintain the pace of new home projects.
The CHBA survey reveals that builders across the country are facing unprecedented challenges. Many are struggling with the sharp increase in construction costs, driven by inflation and supply chain issues. The cost of materials and labor has surged, making it hard for builders to keep projects within budget. At the same time, higher interest rates have led to a reduction in demand for new homes, as potential buyers find it more difficult to secure affordable mortgages.
In addition to these financial pressures, builders are also dealing with more stringent government regulations. New energy efficiency standards and environmental requirements are adding complexity and cost to projects, further straining the ability of builders to deliver new homes. As a result, many builders are scaling back their plans for 2024, with some even considering pausing new developments altogether.
The expected drop in housing starts could have significant implications for Canada’s housing market, particularly in areas already experiencing a shortage of affordable homes. If new construction slows down as predicted, it could exacerbate the existing housing crisis, making it even harder for Canadians to find affordable places to live.
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