Housing prices particularly in places like Toronto and Vancouver are still a big issue and what is driving them is the subject of debate. There is Josh Gordon’s recent policy paper, which places the main emphasis on demand side factors and there is the recent story raising alarm on Toronto’s “housing bubble”. There are of course demand and supply side factors and the supply of new housing coming onto the market is a factor. So today’s post is going to do two things: first, add to the debate on housing supply as a driver of housing prices in Canada and second, celebrate Canada’s 150th by adding a long term time series on housing starts going all the way back to Confederation.
I decided it would be useful to see what housing starts have been like in Canada over the longer term and have several sources of data. I have three series from Historical Statistics of Canada, which provide total dwelling starts for 1949 to 1976 (Series S190-1), total dwelling starts for 1921 to 1950 (Series S198-2) and total dwelling starts (Series S203-2) for 1868 to 1920. There is overlap in these series and I imagine some differences in their coverage and construction but I use them to provide a series on total dwelling starts going from 1868 to 1954. By dwelling units, I mean not only single-detached homes but also semi-detached, row houses, apartments and multiple units. I use S203-2 for 1868 to 1920, S198-2 for 1921 to 1950 and S190-1 for 1951 to 1954. For the period 1955 to 2016, I use the total dwelling units starts from Statistics Canada (the site was working the day I went to get the data) Series v730579. I have provided a Table with the data at the end of the post.
Putting these series together generates Figure 1 and the results show periods of rise and decline. The wheat boom era from 1896 to 1913 certainly stands out showing an increase from 11,600 dwelling starts to peak at 76,300 in 1912 and then a drop. The peak of 1912 was not to be surpassed until 1948 when starts were 95,700. The period from the depths of the Great Depression until the mid 1970s was generally a period of increase and the largest annual number of dwelling starts was in 1976 at 273,203. The period since 1973 has generally been one of some decline with smaller peaks in 1987 (245,986 starts) and 2004 (233,431 starts).
Of course, Canada’s population has grown substantially since 1868 and what is more interesting is adjusting these numbers for population. These dwelling starts were converted into per capita starts using Statistics Canada population series v7422019 for 1868 to 1970 and v52154496 for 1971 to 2016. The year 1868 was set equal to 100 and a per capita index of total dwelling starts constructed and presented in Figure 2.
In per capita terms, the two great eras of growth in total dwelling starts are the wheat boom era from 1894 to 1910 which see the index grow from 57.5 to peak at 297 in 1910 and the post Great Depression era which starts in 1932 at an index value of 39.4 and then rises to peak at 310.5 in 1973. The period since 1973 has seen a decline in the value of the per capita index for housing starts.
Of course, I do not have any estimates for the total stock of housing but I would imagine the total stock has indeed grown fairly steadily. In terms of additions to Canada's housing stock however, the growth rate has slowed. Housing starts were growing faster relative to population before 1973 and since then there has been a moderation. To my mind, this could indeed be a factor in the long term rise in housing prices especially if the demand for housing is actually shifting right faster than supply.
DATA TABLE
YEAR | Dwelling Starts | Population | Per Capita | Per Capita Index (1868=100) |
1868 | 13500 | 3511000 | 0.00384506 | 100.0 |
1869 | 13200 | 3565000 | 0.00370266 | 96.3 |
1870 | 17800 | 3625000 | 0.00491034 | 127.7 |
1871 | 22700 | 3689000 | 0.00615343 | 160.0 |
1872 | 15900 | 3754000 | 0.00423548 | 110.2 |
1873 | 18500 | 3826000 | 0.00483534 | 125.8 |
1874 | 24800 | 3895000 | 0.00636714 | 165.6 |
1875 | 20200 | 3954000 | 0.00510875 | 132.9 |
1876 | 18000 | 4009000 | 0.00448990 | 116.8 |
1877 | 16700 | 4064000 | 0.00410925 | 106.9 |
1878 | 15300 | 4120000 | 0.00371359 | 96.6 |
1879 | 16000 | 4185000 | 0.00382318 | 99.4 |
1880 | 19300 | 4255000 | 0.00453584 | 118.0 |
1881 | 14900 | 4325000 | 0.00344509 | 89.6 |
1882 | 11400 | 4375000 | 0.00260571 | 67.8 |
1883 | 8200 | 4430000 | 0.00185102 | 48.1 |
1884 | 11100 | 4487000 | 0.00247381 | 64.3 |
1885 | 12900 | 4537000 | 0.00284329 | 73.9 |
1886 | 15600 | 4580000 | 0.00340611 | 88.6 |
1887 | 18000 | 4626000 | 0.00389105 | 101.2 |
1888 | 21400 | 4678000 | 0.00457460 | 119.0 |
1889 | 22100 | 4729000 | 0.00467329 | 121.5 |
1890 | 20200 | 4779000 | 0.00422683 | 109.9 |
1891 | 22000 | 4833000 | 0.00455204 | 118.4 |
1892 | 21000 | 4883000 | 0.00430063 | 111.8 |
1893 | 15800 | 4931000 | 0.00320422 | 83.3 |
1894 | 11000 | 4979000 | 0.00220928 | 57.5 |
1895 | 10700 | 5026000 | 0.00212893 | 55.4 |
1896 | 11700 | 5074000 | 0.00230587 | 60.0 |
1897 | 15200 | 5122000 | 0.00296759 | 77.2 |
1898 | 18000 | 5175000 | 0.00347826 | 90.5 |
1899 | 19700 | 5235000 | 0.00376313 | 97.9 |
1900 | 16400 | 5301000 | 0.00309376 | 80.5 |
1901 | 19400 | 5371000 | 0.00361199 | 93.9 |
1902 | 25100 | 5494000 | 0.00456862 | 118.8 |
1903 | 33000 | 5651000 | 0.00583967 | 151.9 |
1904 | 40900 | 5827000 | 0.00701905 | 182.5 |
1905 | 52200 | 6002000 | 0.00869710 | 226.2 |
1906 | 51700 | 6097000 | 0.00847958 | 220.5 |
1907 | 51300 | 6411000 | 0.00800187 | 208.1 |
1908 | 42900 | 6625000 | 0.00647547 | 168.4 |
1909 | 61000 | 6800000 | 0.00897059 | 233.3 |
1910 | 79800 | 6988000 | 0.01141958 | 297.0 |
1911 | 71500 | 7207000 | 0.00992091 | 258.0 |
1912 | 76300 | 7389000 | 0.01032616 | 268.6 |
1913 | 63700 | 7632000 | 0.00834644 | 217.1 |
1914 | 44000 | 7879000 | 0.00558447 | 145.2 |
1915 | 21300 | 7981000 | 0.00266884 | 69.4 |
1916 | 22800 | 8001000 | 0.00284964 | 74.1 |
1917 | 23500 | 8060000 | 0.00291563 | 75.8 |
1918 | 23600 | 8148000 | 0.00289642 | 75.3 |
1919 | 30600 | 8311000 | 0.00368187 | 95.8 |
1920 | 31100 | 8556000 | 0.00363488 | 94.5 |
1921 | 33900 | 8788000 | 0.00385753 | 100.3 |
1922 | 43500 | 8919000 | 0.00487723 | 126.8 |
1923 | 40800 | 9010000 | 0.00452830 | 117.8 |
1924 | 42300 | 9143000 | 0.00462649 | 120.3 |
1925 | 43400 | 9294000 | 0.00466968 | 121.4 |
1926 | 49400 | 9451000 | 0.00522696 | 135.9 |
1927 | 55600 | 9637000 | 0.00576943 | 150.0 |
1928 | 54200 | 9835000 | 0.00551093 | 143.3 |
1929 | 51400 | 10029000 | 0.00512514 | 133.3 |
1930 | 41300 | 10208000 | 0.00404585 | 105.2 |
1931 | 38000 | 10377000 | 0.00366194 | 95.2 |
1932 | 16800 | 10510000 | 0.00159848 | 41.6 |
1933 | 16100 | 10633000 | 0.00151415 | 39.4 |
1934 | 19400 | 10741000 | 0.00180616 | 47.0 |
1935 | 22200 | 10845000 | 0.00204703 | 53.2 |
1936 | 25700 | 10950000 | 0.00234703 | 61.0 |
1937 | 34600 | 11045000 | 0.00313264 | 81.5 |
1938 | 36600 | 11152000 | 0.00328192 | 85.4 |
1939 | 42200 | 11267000 | 0.00374545 | 97.4 |
1940 | 39900 | 11381000 | 0.00350584 | 91.2 |
1941 | 58800 | 11507000 | 0.00510993 | 132.9 |
1942 | 54600 | 11654000 | 0.00468509 | 121.8 |
1943 | 45900 | 11795000 | 0.00389148 | 101.2 |
1944 | 49800 | 11946000 | 0.00416876 | 108.4 |
1945 | 71500 | 12072000 | 0.00592280 | 154.0 |
1946 | 66900 | 12292000 | 0.00544256 | 141.5 |
1947 | 67700 | 12551000 | 0.00539399 | 140.3 |
1948 | 95700 | 12823000 | 0.00746315 | 194.1 |
1949 | 98600 | 13447000 | 0.00733249 | 190.7 |
1950 | 106800 | 13712000 | 0.00778880 | 202.6 |
1951 | 68527 | 14009000 | 0.00489164 | 127.2 |
1952 | 83246 | 14459000 | 0.00575738 | 149.7 |
1953 | 102409 | 14845000 | 0.00689855 | 179.4 |
1954 | 113527 | 15287000 | 0.00742638 | 193.1 |
1955 | 138276 | 15698000 | 0.00880851 | 229.1 |
1956 | 127311 | 16081000 | 0.00791686 | 205.9 |
1957 | 122340 | 16610000 | 0.00736544 | 191.6 |
1958 | 164632 | 17080000 | 0.00963888 | 250.7 |
1959 | 141345 | 17483000 | 0.00808471 | 210.3 |
1960 | 108858 | 17870000 | 0.00609166 | 158.4 |
1961 | 125577 | 18238000 | 0.00688546 | 179.1 |
1962 | 130095 | 18583000 | 0.00700075 | 182.1 |
1963 | 148624 | 18931000 | 0.00785083 | 204.2 |
1964 | 165658 | 19291000 | 0.00858732 | 223.3 |
1965 | 166565 | 19644000 | 0.00847918 | 220.5 |
1966 | 134474 | 20015000 | 0.00671866 | 174.7 |
1967 | 164123 | 20378000 | 0.00805393 | 209.5 |
1968 | 196878 | 20701000 | 0.00951056 | 247.3 |
1969 | 210415 | 21001000 | 0.01001928 | 260.6 |
1970 | 190528 | 21297000 | 0.00894624 | 232.7 |
1971 | 233653 | 21962032 | 0.01063895 | 276.7 |
1972 | 249914 | 22218463 | 0.01124803 | 292.5 |
1973 | 268529 | 22491777 | 0.01193899 | 310.5 |
1974 | 222123 | 22807969 | 0.00973883 | 253.3 |
1975 | 231456 | 23143275 | 0.01000100 | 260.1 |
1976 | 273203 | 23449808 | 0.01165054 | 303.0 |
1977 | 245724 | 23725843 | 0.01035681 | 269.4 |
1978 | 227667 | 23963203 | 0.00950069 | 247.1 |
1979 | 197049 | 24201544 | 0.00814200 | 211.8 |
1980 | 158601 | 24515667 | 0.00646937 | 168.3 |
1981 | 177973 | 24819915 | 0.00717057 | 186.5 |
1982 | 125860 | 25116942 | 0.00501096 | 130.3 |
1983 | 162645 | 25366451 | 0.00641182 | 166.8 |
1984 | 134900 | 25607053 | 0.00526808 | 137.0 |
1985 | 165826 | 25842116 | 0.00641689 | 166.9 |
1986 | 199785 | 26100278 | 0.00765452 | 199.1 |
1987 | 245986 | 26446601 | 0.00930123 | 241.9 |
1988 | 222562 | 26791747 | 0.00830711 | 216.0 |
1989 | 215382 | 27276781 | 0.00789617 | 205.4 |
1990 | 181630 | 27691138 | 0.00655914 | 170.6 |
1991 | 156197 | 28037420 | 0.00557102 | 144.9 |
1992 | 168271 | 28371264 | 0.00593104 | 154.3 |
1993 | 155443 | 28684764 | 0.00541901 | 140.9 |
1994 | 154057 | 29000663 | 0.00531219 | 138.2 |
1995 | 110933 | 29302311 | 0.00378581 | 98.5 |
1996 | 124713 | 29610218 | 0.00421182 | 109.5 |
1997 | 147040 | 29905948 | 0.00491675 | 127.9 |
1998 | 137439 | 30155173 | 0.00455773 | 118.5 |
1999 | 149968 | 30401286 | 0.00493295 | 128.3 |
2000 | 151653 | 30685730 | 0.00494213 | 128.5 |
2001 | 162733 | 31020596 | 0.00524597 | 136.4 |
2002 | 205034 | 31358418 | 0.00653840 | 170.0 |
2003 | 218426 | 31641630 | 0.00690312 | 179.5 |
2004 | 233431 | 31938004 | 0.00730888 | 190.1 |
2005 | 225481 | 32242364 | 0.00699331 | 181.9 |
2006 | 227395 | 32570505 | 0.00698162 | 181.6 |
2007 | 228343 | 32887928 | 0.00694306 | 180.6 |
2008 | 211056 | 33245773 | 0.00634836 | 165.1 |
2009 | 149081 | 33628571 | 0.00443316 | 115.3 |
2010 | 189930 | 34005274 | 0.00558531 | 145.3 |
2011 | 193950 | 34342780 | 0.00564748 | 146.9 |
2012 | 214827 | 34750545 | 0.00618197 | 160.8 |
2013 | 187923 | 35155451 | 0.00534549 | 139.0 |
2014 | 189329 | 35544564 | 0.00532652 | 138.5 |
2015 | 195535 | 35848610 | 0.00545447 | 141.9 |
2016 | 197916 | 36286425 | 0.00545427 | 141.9 |
This analysis raises some interesting points. I wonder if it would remain consistent should we look at the net additions (completions - loss (demolition, conversion, etc))of period t compared to population growth in period t+1. Or perhaps backward as a function of demand pressures that have been observed.
As starts have no guarantee to be added to the market until they are completed, and not all starts end up in completions, they might not be a robust indicator.
Posted by: Tyler | March 17, 2017 at 11:31 PM
Adjusting for population is, of course, necessary, but the correct adjustment is for households. The number of persons per household has also changed. With rising age of population and marriage, and smaller families, the population today may represent a larger number of households.
Creating even a very rough approximation of the household number time-series would be a great update to this post. Although, I am unfamiliar with the data, for recent years this number may be available. A linear transition from an approximation to 1868 numbers would be sufficient, but demographic pyramids for 1868 would be key.
Posted by: David | March 18, 2017 at 08:21 AM
Addendum to comment on households: The link to Statistics Canada show a chart of the relevant household numbers from 1851. The linearity assumption was indeed a good first approximation:
The shift to smaller households over the past century
http://www.statcan.gc.ca/pub/11-630-x/11-630-x2015008-eng.htm
Posted by: David | March 18, 2017 at 08:28 AM
Those are good points Tyler & David. I'm not sure if I have come across any data linking starts to completions at least not over a 150 year span. Having completions might also provide a way to estimate a stock of housing variable going back to Confederation. I suppose one could get an estimate of the housing stock from the 1871 census and work forward from that. The point about using households is also a good one and would provide an additional way of presenting the data. One does wonder if the number of households has been growing faster than population in recent decades.
Posted by: Livio Di Matteo | March 18, 2017 at 09:26 AM
A friend of mine who was a real estate lawyer in Toronto told me that there was evidence of falling household size at least in Toronto - at the time the number of households in the old city of Toronto had grown significantly in the previous 20 years while the population had not (though I expect that latter trend would no longer be true. It makes sense, between aging populations and the decline of marriage, that households would grow faster than population.
Posted by: Bob Smith | March 19, 2017 at 02:38 PM
Out of curiosity, did anyone actually bother to look at the link in my previous comment? As both Livio and commenter Bob seem to muse about household numbers while the link provides Statistics Canada quantitative data on this. I'll save you the trouble, the people per household went from 3.5ppl to 2.5ppl since 1970 (a 29% decline) and it was 10 ppl/household a 100 years ago. The household growth rate is consistently 2%-4% higher than population growth rate.
Posted by: David | March 20, 2017 at 05:16 AM
Livio,
I believe you are correct that the data does not go that far back, and regardless the methodology has likely changed multiple times. CMHC does provide data back to 1991 as seen here:
https://www.cmhc-schl.gc.ca/en/hoficlincl/homain/stda/data/data_001.cfm
Though it would be worth noting that due to the long-horizon of housing construction, creating a lagged variable between starts and completions could be difficult.
CMHC does appear to have data that goes back to at least 1962 as found here:
https://www.cmhc-schl.gc.ca/popup/timeseries/en/index.html
Though it does not seem yet to be on their website.
The use of net additions with David`s approach to HH size could prove interesting in further analysis.
Posted by: Tyler | March 20, 2017 at 11:34 AM
Thanks David. Given there are fewer people per household and the number of households is growing faster than population than a dwelling starts per household series would likely show we are adding even less to housing supply. At some point I would like to update the post but it is March...
Posted by: Livio Di Matteo | March 20, 2017 at 12:15 PM
What do we mean by 'housing starts'. For example, condo construction has increased over the last few decades, and is this considered 'one start', or is each unit in a condo a separate 'start' here?
Posted by: Kapil | March 21, 2017 at 02:43 PM
@kapil: A 100 unit condo project would be 100 housing/dwelling starts.
Posted by: Livio Di Matteo | March 21, 2017 at 09:42 PM