The trend in housing starts was 216,770 units in October 2017, compared to 215,153 units in September 2017, according to Canada Mortgage and Housing Corporation (CMHC). This trend measure is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts.

”The trend in housing starts essentially held steady in October following a decrease in September,” said Bob Dugan, CMHC’s chief economist. ”Nevertheless, new home construction remains very strong in 2017, as the seasonally adjusted number of starts has been above 200,000 units in nine of ten months so far this year.”

Monthly Highlights

New Brunswick

After four years of declining construction activity, population growth has helped push New Brunswick’s housing starts up 28% year-to-date. Starts have been strong across the province, with much of the activity concentrated in the Moncton Census Metropolitan Area (CMA). Multifamily starts have been particularly strong in the hub city, up 49% year-to-date.

Montréal

In the Montréal area, this past month saw the highest level ever recorded of residential construction for the month of October, with close to 3,500 housing units started—half of them on the Island of Montréal. Once again in 2017, condominium and rental housing construction has driven the growth. The decrease in inventories of completed and unsold condominiums and the low vacancy rates in newer rental buildings seem to have prompted developers to ramp up on construction projects this year.

Ottawa

Low-rise housing starts trended higher in October supported by improved employment and earnings this year. This increase was just enough to offset the effect of the sharp decline in apartment starts this month. To October, housing starts were 27% higher than their level in 2016. The rise in starts so far this year was mostly driven by a doubling in apartment starts following three years of declining high-rise construction in the CMA as the number of completed and unsold condominiums has trended down considerably since peaking in mid-2016.

Thunder Bay

October housing starts in Thunder Bay trended at their highest level in three years due primarily to a continued increase in the trend for multiples starts. Downsizing senior households, international post-secondary students and in-migrants to the CMA drawn in by an improving service sector have all been supportive of apartment starts this year. Conversely, the trend for single detached starts has remained mostly flat owing to more affordable alternatives in the resale market.

Toronto

Total housing starts in the CMA trended lower in October 2017, with the most pronounced declines occurring in single-detached home and apartment starts. Lower trending single-detached home starts are reflective of fewer sales of pre-construction units through 2016 and spring of 2017. Sales of pre-construction condominium apartment units have been brisk over the past couple of years and these units continue to start construction with varying levels of intensity each month.

London

Total housing starts in the London CMA were down significantly in October 2017 compared to October 2016, due to a high number of apartments started last October. However, single-detached starts in London CMA posted the highest levels for the month of October since 2007. Strong population growth and a low supply of resale home listings have strengthened demand for new single-detached homes – encouraging builders to continue to keep single-detached starts elevated over recent months.

Windsor

Multi-unit housing starts in the Windsor CMA posted the highest levels for the month of October since 2004, while single-detached starts trended lower for a second consecutive month. Slightly lower demand in the resale market evidenced by a declining sales-to-new listings ratio has discouraged builders from keeping single-detached starts as high as they were early in the summer. Also, Windsor’s growing population of seniors has strengthened demand for multi-unit starts, as seniors have a higher propensity to downsize to apartment units and semi-detached homes as they age.

Calgary

While labour market conditions and housing demand have improved this year, the trend in total housing starts has been slowing down over the last couple of months. A rise in active listings in the competing resale market combined with elevated inventories in the new home market, especially for apartments, have impacted new home construction. Despite the decline in the trend, total actual housing starts to the end of October were still up 24% compared to the same period a year earlier.

Vancouver

Starts trended higher in the Vancouver CMA in October, with seasonally adjusted monthly starts reaching a 12-month high. The increase was primarily driven by a significant uptick in condominium apartment starts in Burnaby, Coquitlam and Surrey, where the demand is strong for more affordable multi-family dwellings. Year-to-date starts remain below 2016 levels, mostly due to fewer projects getting underway in the City of Vancouver and on the North Shore this year.

CMHC uses the trend measure as a complement to the monthly SAAR of housing starts to account for considerable swings in monthly estimates and obtain a more complete picture of Canada’s housing market. In some situations analyzing only SAAR data can be misleading, as they are largely driven by the multi-unit segment of the market which can vary significantly from one month to the next.

The standalone monthly SAAR of housing starts for all areas in Canada was 222,771 units in October, up from 219,293 units in September. The SAAR of urban starts increased by 2.5 per cent in October to 205,935 units.

Multiple urban starts increased by 12.5 per cent to 149,593 units in October. Single-detached urban starts decreased by 17.1 per cent, to 56,342 units.

Rural starts were estimated at a seasonally adjusted annual rate of 16,836 units.

Preliminary Housing Start Data in Centres 10,000 Population and Over

Preliminary Housing Starts data are also available in English and French through our website and through CMHC’s Housing Market Information Portal. Our analysts are also available to provide further insight into their respective markets.

As Canada’s authority on housing, CMHC contributes to the stability of the housing market and financial system, provides support for Canadians in housing need, and offers objective housing research and information to Canadian governments, consumers and the housing industry.

Housing affordability is fundamentally linked to the relationship between the housing stock and market demand. Strong economic growth has created rising labour demand and consumer confidence side effects, while net migration and a wave of millennials entering their household-forming years have rounded out a “perfect storm” of demand-side momentum. In turn, the supply of resale homes on the market in Metro Vancouver has plunged to decade lows. This has led to continuing upward pressure on home prices, because elevated consumer demand hasn’t been matched by an equivalent increase in supply.

It’s more difficult for home builders to meet demand in a timely way, as the emphasis on higher-density communities lengthens the period between project conception and completion. This lag effect has exacerbated short-term market imbalances and even caused some in the media to question the efficacy of long-established market theory.

The inventory of newly-built multi-family homes that are complete and unoccupied has declined markedly over the past three years, and has trended at just 500 units this year. Home builders have taken notice: multi-family housing starts in Metro Vancouver have surged, up 40 per cent to 22,700 units in 2016, and 55 per cent above the 10-year average. An estimated 19,700 multi-family starts are expected this year, and a further 19,000 units forecast in 2018. All this construction activity has created a record level of homes under construction, with about 35,000 multi-family units now in development.

Using data on the average time between housing starts and completions from Canada Mortgage and Housing Corporation (CMHC), we can estimate when the surge in multi-family construction will turn into ready-to-occupy homes. According CMHC, it takes more than 20 months for an apartment project to proceed from start to completion in Metro Vancouver. This varies from a high of 35.7 months in Downtown Vancouver to a low of 12.5 months in Surrey. (Keep in mind that CMHC records a multi-family project as a housing start only after the underground parking structure is complete, so the time between issuing a building permit and project completion is much longer.)

According to our estimates, multi-family home completions will increase 50 per cent above trend levels, rising from less than 4,000 units per quarter in 2016 to approximately 6,000 units through the third quarter of 2018.

While most of these units are already presold, these multi-family completions can add to the overall supply of housing through several other channels: • Households in Metro Vancouver transferring from the rental market into home ownership free up rental supply. • Households in Metro Vancouver moving from existing ownership bolster supply when they put their homes up for sale. • Investors intending to earn rental income create additional rental supply.

The aggregate increase in the housing stock can also help dilute the impact of migrants, non-income seeking investors and first-time buyers/renters on the cost of housing.

This surge in multi-family completions isn’t the only solution for housing affordability in Metro Vancouver. However, a marked increase in aggregate supply can move the needle toward market balance and help slow the pace of housing price/rent growth in the region.

Provided By: BCREA - "Copyright British Columbia Real Estate Association. Reprinted with Permission" 

Metro Vancouver* home sales exceeded typical historical levels in October with the majority concentrated in the townhouse and apartment markets.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in the region totalled 3,022 in October 2017, a 35.3 per cent increase from the 2,233 sales recorded in October 2016, and an increase of 7.1 per cent compared to September 2017 when 2,821 homes sold.

Last month’s sales were 15 per cent above the 10-year October sales average.

"Conditions continue to vary significantly based on property type. The detached home market is well supplied with homes for sale, which is relieving pressure on prices," Jill Oudil, REBGV president said. "It remains a much different story in the townhouse and apartment markets. Buyers of these properties continue to have limited supply to choose from and are seeing upward pressure on prices."

There were 4,539 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in October 2017. This represents a 14 per cent increase compared to the 3,981 homes listed in October 2016 and a 15.6 per cent decrease compared to September 2017 when 5,375 homes were listed.

The total number of properties currently listed for sale on the MLS® system in Metro Vancouver is 9,137, a 0.1 per cent decrease compared to October 2016 (9,143) and a 3.5 per cent decrease compared to September 2017 (9,466).

For all property types, the sales-to-active listings ratio for October 2017 is 33.1 per cent. By property type, the ratio is 16.8 per cent for detached homes, 44.8 per cent for townhomes, and 66 per cent for condominiums.

Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12 per cent mark for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.

"The growth in our provincial economy and job market is contributing to today's demand," Oudil said. "The federal government's announcement of plans to tighten mortgage requirements for the seventh time in the last eight years also helped spur activity in the short term. Many buyers are trying to enter the market before the changes are in place."

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,042,300. This represents a 12.4 per cent increase over October 2016 and a 0.5 per cent increase compared to September 2017.

Sales of detached properties in October 2017 reached 940, a 44.2 per cent increase from the 652 detached sales recorded in October 2016 and a 34.6 per cent decrease from the 1,437 sales in October 2015. The benchmark price for detached properties is $1,609,600. This represents a four per cent increase from October 2016 and a 0.5 per cent decrease compared to September 2017.

Sales of apartment properties reached 1,532 in October 2017, a 30.1 per cent increase compared to the 1,178 sales in October 2016 and a 0.7 per cent decrease from the 1,543 sales in October 2015. The benchmark price of an apartment property is $642,000. This represents a 22.7 per cent increase from October 2016 and a one per cent increase compared to September 2017.

Attached property sales in October 2017 totalled 550, a 36.5 per cent increase compared to the 403 sales in October 2016 and a 17.4 per cent decrease from the 666 sales in October 2015. The benchmark price of an attached unit is $802,400. This represents a 17.7 per cent increase from October 2016 and a two per cent increase compared to September 2017.

*Editor’s Note: Areas covered by the Real Estate Board of Greater Vancouver include: Whistler, Sunshine Coast, Squamish, West Vancouver, North Vancouver, Vancouver, Burnaby, New Westminster, Richmond, Port Moody, Port Coquitlam, Coquitlam, Pitt Meadows, Maple Ridge, and South Delta.

The real estate industry is a key economic driver in British Columbia. In 2016, 39,943 homes changed ownership in the Board’s area, generating $2.5 billion in economic spin-off activity and an estimated 17,600 jobs. The total dollar value of residential sales transacted through the MLS® system in Greater Vancouver totalled $40 billion in 2016.

The Real Estate Board of Greater Vancouver is an association representing more than 14,000 REALTORS® and their companies. The Board provides a variety of member services, including the Multiple Listing Service®. For more information on real estate, statistics, and buying or selling a home, contact a local REALTOR® or visit
www.rebgv.org.

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Canada’s housing markets remain highly vulnerable¹ with evidence of moderate overvaluation and price acceleration, according to  Canada Mortgage and Housing Corporation (CMHC). After a boost in residential construction in 2017, housing starts are projected to decline by 2019, but to remain close to the average level from the last 5 years.

This analysis is from two key CMHC reports released today: the Housing Market Assessment (HMA) and Housing Market Outlook (HMO).

CMHC’s HMA continues to find housing markets in Toronto, Hamilton, Vancouver, Victoria and Saskatoon highly vulnerable. There is low evidence of overbuilding overall at the national level but there are growing concerns surrounding overbuilding in Calgary, Edmonton and St. John’s. In these markets, the supply of new and unsold homes outweighs the demand for housing.

Housing Market Assessment (HMA) highlights

• Despite the recent easing in Toronto’s resale market, we continued to detect moderate evidence of price acceleration with strong growth in home prices among all housing types. High house prices could not be explained by fundamental economic drivers such as income and population growth.
• Hamilton’s housing market remained highly vulnerable for the fifth consecutive quarter. House prices continued to grow more quickly than levels supported by economic and demographic fundamentals.
• Vancouver’s housing market remained highly vulnerable, with evidence of moderate overheating and price acceleration, and strong overvaluation. Imbalances remained between demand and supply in the resale home market, especially for multi-family units.
• Victoria’s overheating persisted due to continued elevated sales for apartments and townhomes in the resale market, but very low inventories in the new home market of unsold homes to support the strong demand.
• The Quebec CMA market is now reported to have low levels of vulnerability. However, overbuilding remains an area of concern as we continue to see vacancy rates increasing for conventional rental housing.

CMHC’s HMO provides a forward-looking analysis anticipating emerging trends in Canada's new home, resale and rental housing markets. Variables covered include housing starts, MLS^® sales, and vacancy rates. Other economic factors considered in our analysis include economic and employment growth, migration, population and mortgage rates.

After the expected boost in residential construction for 2017, housing starts are projected to decline by 2019. Sales in the existing-homes market are expected to decline relative to the record level of more than 535,000 MLS^® sales registered in 2016.

The average MLS^® price should increase over the forecast horizon, but at a slower rate than in the past four years. The average should lie between $493,900 and $511,300 in 2017 and between $499,400 and $524, 500 by 2019.

Housing Market Outlook (HMO) regional highlights

British Columbia

Housing starts and MLS^® sales in B.C. are expected to decrease in 2018 and 2019, but will remain above historical levels, while MLS^® prices will continue to grow at a slower pace as the housing market moves towards more balanced conditions. Rental demand will continue to be strong through the forecast period, with vacancy rates remaining tight and average rents rising.

Prairies

Alberta and Saskatchewan’s gradual recovery from the oil-price shock that started in 2014 will likely contribute to positive net interprovincial migration flows, supporting housing markets. Housing market conditions are expected to continue to slowly transition from a buyer’s market to a more balanced one in 2018 and 2019. However, the overbuilding in many CMAs is expected to put downward pressure on new housing construction. Manitoba has a more diversified economy compared to the other two provinces, which has allowed it to mitigate the risk of large economic swings that the oil-producing provinces experience when oil prices move significantly.

Ontario

Ontario MLS^® sales and starts will trend lower over the forecast horizon, with modest growth in home prices expected relative to the recent past. Rising mortgage carrying costs will exert downward pressure on housing demand and shift demand to multi-unit homes which includes condominium and rental units. Housing demand will hold up better in eastern and southwestern Ontario centres given higher affordability levels, fewer market imbalances and generally better economic conditions.

Québec

Stronger employment growth will stimulate housing demand in 2018 and 2019. As a result, the province’s resale markets will continue to tighten and prices are projected to rise. Meanwhile, population aging will continue to provide support to residential construction in the apartment segment.

Atlantic Canada

Housing starts, MLS^® sales and prices are expected to rise gradually over the forecast period, but continued economic growth will rely heavily on boosting exports.

As Canada’s authority on housing, CMHC contributes to the stability of the housing market and financial system, provides support for Canadians in housing need, and offers objective housing research and information to Canadian governments, consumers and the housing industry.

The Bank of Canada today maintained its target for the overnight rate at 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent.

Inflation has picked up in recent months, as anticipated in the Bank’s July Monetary Policy Report (MPR), reflecting stronger economic activity and higher gasoline prices. Measures of core inflation have edged up, in line with a narrowing output gap and the diminishing effects of lower food prices. The Bank projects inflation will rise to 2 per cent in the second half of 2018. This is a little later than anticipated in July because of the recent strength in the Canadian dollar. The Bank is also mindful that global structural factors could be weighing on inflation in Canada and other advanced economies.

The global and Canadian economies are progressing as outlined in the July MPR. Economic activity continues to strengthen and broaden across countries. The Bank still expects global growth to average around 3 1/2 per cent over 2017-19. However, this outlook remains subject to substantial uncertainty about geopolitical developments and fiscal and trade policies, notably the renegotiation of the North American Free Trade Agreement.

Canada’s economic growth in the second quarter was stronger than expected, and was more broad-based across regions and sectors. Growth is expected to moderate to a more sustainable pace in the second half of 2017 and remain close to potential over the next two years, with real GDP expanding at 3.1 per cent in 2017, 2.1 per cent in 2018 and 1.5 per cent in 2019. Exports and business investment are both expected to continue to make a solid contribution to GDP growth. However, projected export growth is slightly slower than before, in part because of a stronger Canadian dollar than assumed in July. Housing and consumption are forecast to slow in light of policy changes affecting housing markets and higher interest rates. Because of high debt levels, household spending is likely more sensitive to interest rates than in the past.

The Bank estimates that the economy is operating close to its potential. However, wage and other data indicate that there is still slack in the labour market. This suggests that there could be room for more economic growth than the Bank is projecting without inflation rising materially above target.

Based on this outlook and the risks and uncertainties identified in today’s MPR, Governing Council judges that the current stance of monetary policy is appropriate. While less monetary policy stimulus will likely be required over time, Governing Council will be cautious in making future adjustments to the policy rate. In particular, the Bank will be guided by incoming data to assess the sensitivity of the economy to interest rates, the evolution of economic capacity, and the dynamics of both wage growth and inflation.

The next scheduled date for announcing the overnight rate target is December 6, 2017. The next full update of the Bank’s outlook for the economy and inflation, including risks to the projection, will be published in the MPR on January 17, 2018.

Provided by the: Bank Of Canada

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After back-to-back interest rates hikes, the Bank of Canada can stay on the sidelines for longer than first anticipated, with tighter mortgage rules slowing the housing market and uncertainty about NAFTA clouding the outlook.

While more rate increases are on the horizon, possibly before the end of the year, the central bank is expected to hold rates at 1 percent on Wednesday as the list of unknowns and a moderating economy force policymakers to watch and wait.

© REUTERS/Chris Wattie/File Photo FILE PHOTO - A sign is pictured outside the Bank of Canada building in Ottawa 

The unknown fate of the North American Free Trade Agreement, a stronger Canadian dollar and yet more housing regulation are conspiring to weigh on consumption and exports, slowing what had been an unexpectedly strong economic spurt early in the year.

Moreover, the Bank of Canada needs to assess how hikes in July and September play out, particularly since new mortgage regulations finalized last week by Canada's banking regulator add to the overall tightening effect on indebted households.

"Really, they're in uncharted territory," said David Madani, senior Canada economist at Capital Economics. "They've never really had to raise interest rates in an environment where housing regulation has been tightening."

The rules from the Office of the Superintendent of Financial Institutions (OSFI) come on top of separate moves by provincial government authorities to cool housing markets in Toronto and Vancouver.

"My philosophy right now is that (housing) rules are the new rates when it comes to housing," said Adam Button, currency analyst at ForexLive.

"Central banks have washed their hands of managing housing market inflation and have passed it onto governments and regulators."

Analysts will comb through Wednesday's policy statement for the bank's outlook on the housing market and how risks around trade policy have increased after an acrimonious end to recent NAFTA talks.

Bank of Canada Governor Stephen Poloz said earlier this month that while there would be a negative shock to the economy if talks collapse, the bank would wait to see what happened before deciding how to react.

Madani said that before the OSFI rules and the deterioration in the NAFTA talks, he had expected another rate hike in December. But he now sees the bank on hold into next year.

Others see a hike sooner, with third-quarter growth on track to match the central bank's 2 percent forecast and inflation ticking up.

"Core inflation is going to keep firming over the next few months just in response to the growth we've had over the last year, so that will support a couple more rate hikes," said Robert Both, macro strategist at TD Securities. He sees a hike in December and one more in March before the bank pauses.

Markets see 47.2 percent odds of a third rate hike in December, while the median forecast in a Reuters poll also predicted another hike before the year is out. [CAD/POLL]

(Reporting by Leah Schnurr in Ottawa; Additional reporting by Fergal Smith in Toronto; Editing by Dan Grebler)

The British Columbia Real Estate Association (BCREA) reports that a total of 8,340 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in September, an increase of 9.9 per cent from the same period last year. Total sales dollar volume was $5.8 billion, up 30.2 per cent from September 2016. The average MLS® residential price in the province was $693,774, up 18.5 per cent from September 2016.

“BC home sales rose nearly 5 per cent from August on a seasonally adjusted basis,” said Cameron Muir, BCREA Chief Economist. “Total active listings on the market continue to trend at ten-year lows in most BC regions, limiting unit sales and pushing home prices higher. While the economic fundamentals support elevated housing demand, rising home prices are eroding affordability, particularly for first-time buyers.”

Year-to-date, BC residential sales dollar volume was down 12.8 per cent to $57.6 billion, when compared with the same period in 2016. Residential unit sales declined 13 per cent to 81,608 units, while the average MLS® residential price was down 0.2 per cent to $705,501.

BCREA is the professional association for more than 20,000 REALTORS® in BC, focusing on provincial issues that impact real estate. Working with the province’s 11 real estate boards, BCREA provides continuing professional education, advocacy, economic research and standard forms to help REALTORS® provide value for their clients.

To demonstrate the profession's commitment to improving Quality of Life in BC communities, BCREA supports policies that help ensure economic vitality, provide housing opportunities, preserve the environment, protect property owners and build better communities with good schools and safe neighbourhoods.

For detailed statistical information, contact your local real estate board. MLS® is a cooperative marketing system used only by Canada's real estate boards to ensure maximum exposure of properties listed for sale.

Vancouver’s skyline.

Darrryl Dyck/For The Globe and Mail 

Court records and advertisements reveal several ways potential buyers and realtors are eyeing as ways around the 15 per cent tax on foreign buyers, reports Xiao Xu

British Columbia's introduction of a foreign-buyer real-estate tax dumped a bucket of icy water on Vancouver's smoking hot market just over a year ago. Average house prices immediately fell, declining for six months before showing signs of renewed vitality in April and May.

A Globe and Mail examination of court records and advertisements reveals several ways potential buyers are being told they can avoid the 15-per-cent tax. The analysis shows the methods can be straightforward but sometimes messy as they often rely on the quiet participation of friends, relatives or businesses with roots in British Columbia.

And such avoidance, as NDP Attorney General David Eby pointed out when he was the opposition housing critic, is extremely difficult to stop.

Related: Scenes from the wildest real estate frenzy Canada has ever seen

Related: Vancouver home sellers take a wild ride

"They have absolutely no way of enforcing those rules," Mr. Eby said of the Liberal government. "They have no auditors available, they have no capacity to enforce this law. What they are relying on is people to act in good faith."

Mr. Eby is no longer in charge of the housing file and now that his party is in government, NDP ministers have declined to say what they plan to do to either strengthen enforcement, broaden the tax's reach or potentially kill it entirely. The housing ministry directed calls about the tax this week to the finance ministry. Finance officials said they cannot talk about potential future tax changes.

So, for the time being, the tax remains in place. The Ontario government has introduced a similar one for foreign buyers in an effort to calm the Toronto market.

Before the B.C. tax took effect in August of last year, foreign activity was estimated to account for about 10 per cent of sales in the Vancouver region. After the tax took effect, the percentage dropped to almost zero, but it has since increased to about 3 per cent. In Richmond, it has bounced between 8 and 12 per cent.

The province hasn't released data since June, a period that has seen prices for condos and townhouses recover and set records every month, although the average price of a detached home – at $1.67-million –was lower than the $1.76-million seen in July, 2016.

The lack of recent data means it's impossible to know whether foreign buyers have once again returned to the Vancouver market, rendering the tax ineffective.

Several sources told The Globe and Mail that the most common way of avoiding the tax is for a buyer to put the property's title under the names of family members or friends who are Canadian residents.

Disputes documented by the Supreme Court of B.C. show that real estate deals can be easily done between relatives and friends without written agreements but only based on trust, which can eventually result in unclear and hidden ownership of properties. Last month, a Hong Kong businesswoman filed a lawsuit against her ex-boyfriend over ownership of a home in Richmond.

Jennie Wu and Johnny Chu, a Canadian resident, were in a romantic relationship from last November to this summer. While they were dating, Ms. Wu decided to purchase a property in British Columbia because of her frequent business dealings here.

But as a Hong Kong resident, she was required to pay the foreign-buyer tax. To avoid the tax, the pair agreed to put the title under Mr. Chu's name, although Ms. Wu paid all the costs of the property.

The court document from B.C. Supreme Court notes that Mr. Chu knew that the home would be the sole property of Ms. Wu's, and Gary Ma, who was Ms. Wu's realtor, was "fully aware of the intention" of the two parties.

The lawsuit noted Ms. Wu paid cash for all the transactions, but after they broke up, Mr. Chu refused to move out and transfer the property back to her. Ms. Wu's allegations haven't been proven in court and Mr. Chu has not filed a response with the court.

Royal Pacific realtor Sunny Lee said any foreign investor with a relative in Canada can easily avoid the 15 per cent tax.

"It's hard for foreigners [to avoid the tax] if they want to buy a house. But if this foreigner has relatives in Canada, closely related, then things will be very easy," Mr. Lee said.

Mr. Lee said some foreign investors purchase properties in Vancouver in the name of their children, who came to Canada as international students first and then became Canadian residents. He added these students can afford a house within a few years after graduation, but whether it's for their own residence or whether it is to hold as an investment for their parents, is impossible for authorities to know.

"They got help from their parents, and it's legal," Mr. Lee said.

Among the 50 most expensive properties in Vancouver in 2016, The Globe found that two were owned by students and three were owned jointly by a student and a "housewife" or "businesswoman," as noted on the property title.

Kenneth Pazder, lawyer and owner of Pazder Law in Vancouver, said it's difficult to distinguish between who is on a property's title and who really owns the property, because the whole system "is predicated on people being truthful."

"Some of these things are sort of difficult to prove unless somebody took the person to court or made an assessment and the person had to challenge it," Mr. Pazder said.

For prospective foreign buyers without a local connection, Chinese-language online advertising has offered some solutions, but the advice can be questionable.

One ad, since taken down, suggested creating a legal partnership, registered in British Columbia.

Sutton Premier Realty agent Zheng Zhao had an ad on VanSky.com for months, maintaining the foreign-buyer tax doesn't apply to partnerships. Mr. Zhao said he could form a B.C.-registered partnership with a foreign buyer and then purchase a property in the name of the partnership without the obligation to pay the tax. The buyer pays the full price of the home with the right to lease and sell the home later, while Mr. Zhao and the partnership do not shoulder any legal or financial responsibility.

In exchange for entering into the partnership, Mr. Zhao required payment of 3 per cent of the property's purchase price and an annual partnership fee of $1,000. He maintained in several media interviews that the practice was legal.

Now, though, the agent says he will not offer the service since receiving advice not to do so, although he wouldn't say from where.

"I've taken a renewed look at my partnership agreement and have indeed come to the realization that there are flaws in the legal aspects of my original plan," he said in an interview this week. "Knowing what I know today, I would have had second thoughts about the soundness of my whole idea."

A Craigslist ad posted in May, now deleted, also alleges that business partnerships can be a way around the foreign-buyer tax. The ad said: "We offer entering into business partnerships with British Columbia based business and getting into contractual relationships for buying residential property." The ad noted that it is "completely legal."

The Globe tried to reach the publisher of the ad, but didn't receive a response.

A spokeswoman with the Ministry of Finance declined to comment specifically on whether such partnerships are legal, but said in a statement that "the government takes tax avoidance attempts extremely seriously."

"We will ensure that anti-avoidance rules carefully applied to ensure the appropriate tax is applied."

Alexander Ning, a Vancouver notary public, said he has heard of people attempting to use partnerships to avoid the tax but the scheme is absolutely illegal because it involves hiding who the beneficial owner of the property actually is. "It's definitely not legal by the actual law and also the spirit of the law."

All kinds of people put all sorts of stuff on the Internet which is not true or correct.

Kenneth Pazder, lawyer

The Globe uncovered other types of ads using tax avoidance as a selling point for foreign investors, such as that of Apex Western Homes Ltd., which notes its exclusive rent-to-own program is a way for overseas buyers to avoid the tax. In this case, foreign investors can be renters first and, ultimately, own the property.

The Vancouver company's program, which launched in February, requires investors to sign a five-year contract with a fixed purchase price. The potential buyers pay the seller a one-time, 5-per-cent non-refundable down payment, which grants the buyers the right to purchase the property at any time in the five years. Following the down payment, the buyer pays monthly rent, which includes payment toward loan principal and interest. If the potential buyers are newcomers to the country, they can use the five years to become a Canadian resident, and then they will no longer be subject to the tax when purchasing the home.

"It delays that time so you can get your PR [permanent residency], and you don't have to pay the 15 per cent," said CEO Ray Vesely. "It does give another option … I think it's a great idea to help people enter into the market."

Mr. Vesely said the program has attracted lots of interests and the company is planning a campaign to advertise it, but before that, he said, he needs to make sure everything about the program is "perfectly legal."

The finance ministry statement specifically said "rent-to-own models cannot be used" as a way of avoiding taxes.

Social media has also presented some potential solutions to the tax. Local realtor Tiffany Tseng wrote on her Facebook page last July, in a posting that is still available, that "there are many ways for foreign buyers not to pay the 15 per cent tax."

Ms. Tseng cited two examples: One is purchasing and reassigning a presale home. Presale homes are not subject to the foreign-buyer tax. The other, she said, is to establish a trust company.

But Ms. Tseng said in an interview she hasn't actually used these methods, adding that she posted these ideas to help dissolve fears among her clients.

"The announcement of the foreign-buyer tax caused panic among a lot of people. I hope to tell many of the local buyers, who are also my main clients that the market is not going to collapse."

Simon Fraser University finance professor Andrey Pavlov said any entity for which the ultimate beneficiary is a foreign person is subject to the tax, and he suggested establishing a trust would not be a legal way to avoid it.

"The foreign buyer tax clearly states that it is the ultimate beneficiary that matters, not the intermediate entity purchasing the property," said Prof. Pavlov.

Mr. Pazder said many of the tax avoidance advertisements are just "schemes," used to attract buyers.

"All kinds of people put all sorts of stuff on the Internet which is not true or correct."

Not paying the tax could result in a penalty of the unpaid tax plus interest and a fine of $200,000 for corporations or $100,000 for individuals and/or up to two years in prison.

Marilee Peters, spokeswoman for the Real Estate Council of British Columbia, said the council takes "immediate and appropriate" action against any licensees who advertise or advise clients on ways to avoid the tax.

"We have taken action in some cases to have licensees remove advertising that promotes methods to avoid the tax, and we have opened investigations," said Ms. Peters.

She added the council advises all consumers to obtain independent professional legal or accounting advice before entering into any transaction promoted as a measure to avoid the tax.

1.76-million seen in July, 2016.

Provided by: The Globe & Mail & XIAO XU

The trend in housing starts was 214,821 units in September 2017, compared to 220,573 units in August 2017, according to Canada Mortgage and Housing Corporation (CMHC). This trend measure is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts.

“Housing starts are trending lower in September after increasing for eight consecutive months,” said Bob Dugan, CMHC’s chief economist. “Nevertheless, new home construction remains very strong as the seasonally adjusted number of starts was above 200,000 units for four straight months.”

Monthly Highlights

St. John’s

Drivers such as population, income and employment have put downward pressure on new home construction activity. Total housing starts fell 34% in September compared to the prior year. Single-detached starts declined 33%, while multiple starts declined 42%.

Prince Edward Island (PEI)

Tightness in PEI’s resale sector continues to cause demand to spill over into the Island’s new home market. Starts of single-detached homes were up 93% year-to-date in September, with most of the activity concentrated in the Charlottetown area. Record high levels of international migration continue to support starts of multi-family dwellings, which were up 16% year-to-date.

Quebec

In the third quarter of 2017, the annual rate of housing starts for the province overall reached 43,736 units, up from the level registered for the previous quarter (40,564 units). This last result, as were the relatively high totals for the previous quarters, was attributable to the strong momentum observed in the multi-unit housing segment, particularly in the case of rental apartments, for which starts remained significant in the Montréal and Québec areas. Given the strong activity observed so far, Quebec starts will likely post a gain in 2017.

Toronto

Homebuilders broke ground on fewer homes in the Toronto Census Metropolitan Area (CMA) during September 2017. Total housing starts trended lower by 7% in September from the previous month led by lower apartment starts. Monthly variations in high-rise starts are typical given delays in getting large scale projects off the ground. Low-rise starts remained strong. The overall pace of new home construction remains stable as strong demand for new homes in the Toronto CMA continues to persist.

Brantford

Single-detached starts were high in Brantford in September. New single-detached homes in Brantford were selling for $550,000 to $700,000 early this year, attracting the growing number of households from Hamilton and the GTA who could no longer afford detached homes in their markets.

London

Both single-detached and multiple housing starts in London CMA posted the highest levels for the month of September since 2006. Strong population growth and recent income gains have strengthened demand for new single-detached homes – encouraging builders to continue to keep single-detached starts elevated over recent months.

Saskatoon

Total housing starts trended lower in September after production of both single-detached and multi-family units slowed. While the pace of construction in the singles sector has been on par with last year, multi-family construction was down 30% after nine months this year. Elevated inventory of completed and unsold condo apartments have remained a drag on this sector. All told, total year-to-date housing starts in September were down 13%, compared to the same period a year ago.

Vancouver

Housing starts in the Vancouver CMA trended downwards in September as fewer multi-family home projects got underway. The high level of housing starts over the past year has led to a record number of units being under construction in the region, leaving little spare capacity to start additional projects. New home construction in the Vancouver CMA is being supported by population growth, a strong local economy, and low financing costs.

CMHC uses the trend measure as a complement to the monthly SAAR of housing starts to account for considerable swings in monthly estimates and obtain a more complete picture of Canada’s housing market. In some situations analyzing only SAAR data can be misleading, as they are largely driven by the multi-unit segment of the market which can vary significantly from one month to the next.

The standalone monthly SAAR of housing starts for all areas in Canada was 217,118 units in September, down from 225,918 units in August. The SAAR of urban starts decreased by 5.1 per cent in September to 198,910 units.

Multiple urban starts decreased by 10.7 per cent to 131,388 units in September. Single-detached urban starts increased by 8.2 per cent, to 67,522 units.

Rural starts were estimated at a seasonally adjusted annual rate of 18,208 units.

Preliminary Housing Starts data are also available in English and French through our website and through CMHC’s Housing Market Information Portal. Our analysts are also available to provide further insight into their respective markets.

As Canada’s authority on housing, CMHC contributes to the stability of the housing market and financial system, provides support for Canadians in housing need, and offers objective housing research and information to Canadian governments, consumers and the housing industry.