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Or sign-in if you have an account.Rental starts totalled 130,000 over the past year, while condo starts fell below 50,000 for the first time since the Great Financial Crisis. Photo by Getty ImagesSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorConstruction of rental properties has been booming, but this much-needed boost could be setting Canada up for a bigger housing problem down the road, warns an economist. Kari Norman, senior economist at Desjardins Group, says that Canada’s housing market is undergoing one of its biggest shifts in decades as developers turn away from money-losing condo projects and pivot to purpose-built rentals.Rental starts totalled 130,000 over the past year, while condo starts fell below 50,000 for the first time since the Great Financial Crisis. Breaking business news, incisive views, must-reads and market signals. Weekdays by 9 a.m.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Posthaste will soon be in your inbox.We encountered an issue signing you up. Please try again“Although the shift helps ease Canada’s longstanding shortage of dedicated rental accommodation, it also raises an important question: could today’s rental boom become tomorrow’s homeownership shortage?,” said Norman. The reasons developers are fleeing the condo market are well known. Higher interest rates, elevated construction costs and government fees have made many condo projects too pricey to build at current selling prices. As investors retreat, presales that builders depend on for financing have plummeted. Meanwhile, after decades of under-building, the economics of purpose-built rental projects have been boosted by targeted Canada Mortgage and Housing Corporation financing programs and the removal of the GST on new rental construction, said Norman. It’s not that the increase in rental construction is driving the condo downturn; that’s happening all on its own. Rather, “rental construction is helping sustain development activity during the ownership market downturn,” she said. And the decline in homeownership construction is not limited to condos. Total housing starts over the past year are 43,000 higher than in 2019, but that’s only because of a 73,000-unit increase in rental starts, she said. Starts intended for ownership fell by 30,000. “As a result, the ownership share of housing starts plunged from more than 70 per cent to about 45 per cent,” said Norman. “Simply put, Canada is building more homes, but fewer of them are being built for purchase.”There is no shortage of homes for sale yet, but since it takes years to complete a condo project the dearth of starts today may not show up until later this decade, she said. This could drive up prices down the road when demand begins to recover.Norman says policies supporting rental properties should not be reversed because Canada still needs “substantially” more rental supply. But policy makers should be aware that the rental construction boom may be masking the deterioration of the home ownership pipeline, and take action to support both. “Ultimately, a balanced housing system can only be achieved by maintaining a robust pipeline of both rental and ownership construction,” she said. Sign up here to get Posthaste delivered straight to your inbox. BofA Global Investment StrategyBank of America’s bull and bear indicator is screaming sell.The proprietary barometer that acts as a contrarian trading rule by measuring investor fear and greed hit a five-year high this past week.“We remain in summer Retreat/Rotate not Reload camp,” said strategist Michael Hartnett, whose team recommends investors retreat from risk assets and/or rotate into “defensives, duration and the U.S. dollar.”The warning comes after equities hit record highs last week as investors rushed back into semiconductor stocks, easing fears that the AI rally was waning.BofA said U.S. equities attracted a net US$9.6 billion in the week through Aug. 5, putting them on track for a record year of inflows.Unifor is set to open contract negotiations with General Motors Co. today after already reaching a deal with Ford Motor Co.Earnings: Barrick Mining Corp., Cargojet Inc., Silvercorp Metals Inc.Investing pro Peter Hodson bought his first stock in 1974 and half a century later he is still looking at stocks pretty much 24/7. Hodson looks back at five big changes in the investment industry since the 1980s for better and worse. Investors can trade more cheaply and more knowledgeably now, but can get into trouble more easily too. Read moreInterested in energy? The subscriber-only FP West: Energy Insider newsletter brings you exclusive reporting and in-depth analysis on one of the country’s most important sectors.Are you worried about having enough for retirement? Do you need to adjust your portfolio? Are you starting out or making a change and wondering how to build wealth? Are you trying to make ends meet? Drop us a line at wealth@postmedia.com with your contact info and the gist of your problem and we’ll find some experts to help you out while writing a Family Finance story about it (we’ll keep your name out of it, of course).Want to learn more about mortgages? Mortgage strategist Robert McLister’s Financial Post column can help navigate the complex sector, from the latest trends to financing opportunities you won’t want to miss. Plus check his mortgage rate page for Canada’s lowest national mortgage rates, updated daily.Visit the Financial Post’s YouTube channel for interviews with Canada’s leading experts in business, economics, housing, the energy sector and more.Today’s Posthaste was written by Pamela Heaven with additional reporting from Financial Post staff and Bloomberg.Have a story idea, pitch, embargoed report, or a suggestion for this newsletter? Email us at posthaste@postmedia.com.Bookmark our website and support our journalism: Don’t miss the business news you need to know — add financialpost.com to your bookmarks and sign up for our newsletters here Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. 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