Building Boom? I Think Not!

2019 building levels in the GTA are comparable to 1990s levels – it’s astonishing. Let’s hope that the current/upcoming recession/depression/immigration decrease/foreign investment decrease aren’t how we solve this longstanding supply problem.

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Building boom? I think not!

One of the benefits of aging is having a longer history of experiences. I remember the housing recession in the early 1990s – it’s when I lost my job and my house. This was a period of housing stagflation (persistent high inflation combined with high unemployment and stagnant demand) in the GTA. 1995 was the worst year for housing completions in the 1990s.

A comparison of early 1990s with 2019 is truly astounding. Thank you, Ben Myers from Bullpen Consulting, for the outstanding data!

  • The total amount of square footage built in 2019 is comparable to what was being built annually in the early 1990s.
  • The number of bedrooms built in 2019 is the lowest in the past 22 years, and is comparable to 1990s levels.

The main cause of the GTA housing problem has not changed in decades! We are simply not building enough homes. Supply is sorely lacking. All levels of government are contributing to this problem, and none have been able to make any meaningful improvements.

We can expect this situation to deteriorate before it improves, if past performance is any indication.

The most likely thing to ease the problem is a total collapse in demand as a result of (take your pick(s)) recession/depression/immigration decrease/foreign investment decrease. All of these reductions in demand have significant adverse impacts on the economy. Let’s hope this isn’t how we solve the supply problem. I would love to see policy changes from all levels of government. That is the solution.

I’d love to hear your take on this issue. Comment below or find me on Facebook or LinkedIn to join the conversation.

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