Misleading signals from China's capital flight into Canadian homes appears to have sparked a panic-building spree among homebuilders. Canadian housing starts surged in March, to the highest annualized level since 2007, driven by higher multiple unit construction.
Housing starts soared to an annualized 253,720 units in March, from 214,253 units in February, the Canada Mortgage and Housing Corporation said in a statement. Multiple-unit starts in urban areas surged 30 percent in March to 160,989 units, it said.
This is 6 standard deviations above economists' expectations...
It seems clear that lack of affordability after Chinese economically irrational bids for Canadian homes has sparked an apparent demand for renting and this is the capital misallocation result.