Record Number of Homes Under Construction

CMHC released data for the Vancouver Census Metropolitan Area today and part of the data released indicates that there were a record number of housing units under construction in September at 23,111. Previous highs were August at 22,421, November 2006 at 22,311, and 16,279 in March 1994 during the last building boom.

As units complete I expect it to put pressure on existing home sales and further new home sales and I believe the market to be currently saturated with supply. If my belief is true then it would hold that we would need significant population growth with people who have the ability to purchase homes in order for no price correction to happen.

A significant price correction in new and existing homes is likely to happen during the next 2-4 years as prices of new and existing homes are priced out of reach for all but a few buyers with existing home equity and the wealthy minority.