Housing starts start too late · ↗ www.missingmiddleinitiative.ca

Professor Mike Moffatt of the Missing Middle Initiative explains in this article why Canadian data on housing starts are problematic. In short:

• The Canadian definition of a housing start is out of step with those used in peer countries. For a project to be counted as a housing “start”, its foundation must be completed and at grade. For some projects, this can occur a year or more after construction begins.
• Housing starts therefore generally reflect the health of the housing market two or more years earlier, when the relevant business decisions were made. This makes Canadian housing starts a poor real-time indicator.
• Governments in other countries track pre-construction or new housing sales and excavations, both of which occur much closer to the business decisions that lead to new housing than the point captured by Canada’s current definition of a housing start. These would be better real-time indicators of the health of the housing market.