Why Are Housing Starts Down So Much In Windsor - Essex in 2019?

A lot of economists see statistics such as new housing starts (basically building permits to construct new residential housing) as a leading indicator for the economy. CMHC reported in their March 2019 Housing Start Data, that the Windsor-Essex region’s housing starts had fallen 23% year over year. Is that cause for concern?  Today, we are going to discuss some of the factors we think that are leading to this slowdown and what else you need to know.

Reason 1 - Shortage of Building Lots

I know this seems very obvious but this really is an issue. I personally know people who would love to build but can’t find a building lot for sale. A lot of subdivisions are nearing completion and the pipeline to replace them is pretty slim. Basically, not as much supply of building lots compared to last year.

Reason 2 - Bringing on Additional Supply of Building Lots is Difficult

We have so much land in Windsor they say, why don’t you just develop it? While Windsor isn’t the most dense city, getting a piece of land to a serviced, shovel ready project isn’t an easy task.  If you have to go through the municipal rezoning process that can take 6 months easily and can cost tens of thousands of dollars in some cases. There are also significant area of red tape to battle through including: biology studies, archeological studies, utility servicing studies, traffic studies, noise studies, etc. This can take years and lots of capital, with no guarantee of success, or can make a project uneconomical. This all leads to decreased supply long term and is a major issue for municipalities all over the province with Windsor being no exception.

Reason 3 - New Home Prices are Getting Unaffordable

Some of these construction costs are driving the pricing of new homes to price points that are no longer affordable for the average person. It's commonplace to see $700-800k price tags on the average new build. The market has been doing extremely well locally but sticker shock  has to have some effect on demand eventually.

Reason 4 - Labour Shortage Affecting Trades Pricing

Tying into point 3, part of the reason for the large price tags on some of these new builds are the escalating pricing from the trades.  Electricians, plumbers, bricklayers, etc are in high demand and able to command premium pricing in today’s market. This trickles down to the end buyer.  Hard to see this changing anytime soon.

Reason 5 - Its Taking Longer to Build Homes

Essentially the labour shortage also means slower build times.  Back 5 years ago it wasn’t uncommon to build a house in 90 days. Now it's not uncommon to see 180+ days. This statistically is taking units out of the data.

Bonus Point - What Does All This Mean for the Resale Market?

This decrease in new home sales activity is adding demand to the resale market. Taking some of the buyers out of the new home market for the above reasons is directing them to the resale market. And the resale market already has a supply-demand imbalance. This increased demand could explain some of the crazy resale statistics to start 2019.

Thats how we are seeing the new home starts data. What are you seeing out there?

Real Estate Insider: February 2019 News Report

Welcome back! This month we compiled a set of topics fit for home owners and investors alike to help you weigh your options before making some of the big decisions in real estate.


If you are thinking of investing in commercial real estate (CRE), this article does a fantastic job of laying out the basics of all aspects of CRE to help point you in the right direction. After reading this, give us a call to learn more! >>

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Radon, the silent killer. Make sure you know if you are at risk of harmful radon gas because it is one of the most preventable cause of lung cancer there is! Read here to find out what you need to know. >>

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Your ego might like the big house, but your back and wallet won’t. Here are 6 reasons to avoid buying a large house. >>

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Do you have foreign investments and want to buy a home in Canada? This article can explain some of the hoops you’ll need to jump through and some of the calculations you need to consider before making the leap. >>

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Winter is considered the real estate “off-season” because there are less listings, less buyers, and less motivation to go out and look at houses. Read why these are the perfect reasons to buy during this time! >>

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Thinking of buying an investment property but don’t have the down payment in your bank account? Have you thought about a home equity line of credit (HELOC)? Whether you have, or you have no idea what that is, this article is for you. >>

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Ever thought of what would happen to your mortgage if you pass away? This article walks you through multiple scenarios if this question ever crossed your mind. >>

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5 tips from a lawyer to make sure you are protected in 2019! >>

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What’s going on with mortgage rates? Make sure you do your research before your next renewal so you get the best rate possible. You can start with this video! >>

Real Estate Insider: January 2019 News Report

Welcome back to a brand new year, Real Estate Insiders! We thought this month would be a great time to cover a variety of topics including living life in a big city, creating wealth, performing background checks, and even why the numbers in your address could deter potential buyers!

Is the “American Dream” an outdated concept? Does yours involve a house with a yard and a white picket fence, or something more suited to your lifestyle? Read about why everyone might be a lot happier if they made their own definition of the American (or Canadian) Dream. >>

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Does your address contain the number 4 or 13? If so, that might be a deal breaker for some cultures. Read here how these numbers have caused headache in housing developments and how city planners and contractors are dealing with it. >>

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If you’re thinking of how to split your estate between your children, this article won't help you decide who is your favourite, but it will help with a few of the tax questions! >>

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Finding the right property manager is essential to creating and maintaining a good portfolio. If you decide to use a property manager, be sure to read this article to help find the right one for you! >>

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Are you thinking of buying your first home? Take it from someone who’s been there before! This article describes almost every cost you should prepare for when buying a home. >>

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Not every investment you make is going to be a winner, however a big part of investing is not making impulsive, emotional decisions! Read how this investor “lost” $130,000 on his rental property but managed to turn it around by keeping a level head and trusting the process. >>

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Don’t be blinded by the cap rate. Here’s a list of things to consider when evaluating cap rates or multiples on a property—and why these tools are simply a starting point. >>

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There are so many options when it comes to creating wealth for yourself, but the common strategy between them all is to diversify. This blogger decided she needed a way to diversify her portfolio and caught the real estate fever! Read here how she turned her love of HGTV into a very profitable investment strategy. >>

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Tenants can make or break an investment property, so we want to make sure you are doing everything you can to ensure you have the best tenant possible! Here’s a list of what you should do to complete a successful background check. >>

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For many people, living in the big city would be a dream come true, but is it really worth it? Read here how the high costs of living are pushing many young adults to pursue a larger life in smaller cities. >>

Real Estate Insider: March 2018 News Report

Should you teach your old house new tricks? Want the best mortgage rate? Are you misusing your Line of Credit? Read all this and more in our latest edition of the Real Estate Insider!


A properly calculated CAP rate can be a very useful tool, but there are many other factors people should be looking into when buying or selling income properties. Are you aware of them? Find out here. >>

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“Smart Homes” are taking the world by storm, but is the value added really worth the investment in older homes? It depends! Find out more here. >> 

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Are you buying a new home? Here are a few things you should know to make sure you’re protected! >>

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If you own or are thinking of getting a heat pump, routine manual cleaning may not be enough! Deep cleaning and regular filter changes are almost a necessity! Read why here. >>

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Divorce is an unfortunate yet very common part of today’s society. To make sure you are protected through this process, here are 6 myths about divorce that everyone should know. >>

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Are you getting the most out of your line of credit? It can be one of the most useful tools to building wealth and financial freedom, but only if used correctly! Read here to get tips on using your LOC to your advantage. >>

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Real Estate > Stocks. Here’s why. >>

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AirBNB is an easy way to make money if you’ve got an empty property and are willing to put in the work. Here are some tips and tricks everyone should know before venturing into this market. >>

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Everyone is talking about the new standard residential lease form in Ontario, this article should help with explaining everything you must know about this controversial topic. >>

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CALLING ALL DEAL HUNTERS! Here are the three top ways to ensure you are getting the best rate on your next mortgage. >>

Bonus – Tax Time 2016: Tax Refunds

Now that the tax filing deadlines are officially behind us, a good portion of you will be getting a nice refund from the tax man! Now, before you go blowing it on the latest gadget or on a weekend getaway, it’s important to remember that this isn’t free money and it really is just a refund of the overpayment of taxes you made throughout the year. Considering it comes in the form of a lump sum, there are many opportunities to invest that money which can benefit you on an annual basis. Today we are going to make a list of the prudent potential uses for that hard earned tax refund, from your friendly local real estate professional’s perspective☺

Save Up For A Down Payment On Your Next Property

A lump sum tax refund can be a great head start towards saving for your next down payment.

Renovate or Update Your Investment Property

Have you deferred a renovation because cash flow has been tight? With your tax refund in hand, now could be the time to address some of those outstanding issues.

Value Added Upgrades to Your Home

Thinking about adding a bathroom or changing some flooring? Having some freed up cash to complete these tasks will not only make your further enjoy your home but increase its resale value.

Paying Down Mortgages

Without delving into people’s personal financial situations, paying off debt is never a bad option whenever you have a cash windfall. It gives you a guaranteed return on investment (ie. interest costs  saved). If you have any outstanding non-mortgage debt (credit cards, car loans, lines of credit) I would recommend you start with those as they are typically at the highest interest rate. Once those are taken care of, I would move to the mortgage on the principle residence. Lastly, I would pay down the mortgage on the income properties because of the tax deductibility of interest (as opposed to the principle residence mortgage debt).

So there you have it readers. What do you normally do with your tax refund?