August housing starts come in flat
By Adam FreillConstruction Residential
Despite a well-publicized need for additional housing, Canada’s housing starts hit a stall in most regions in August.
Housing starts are feeling a pinch in many parts of the country, reports Canada Mortgage and Housing Corporation (CMHC). While the August trend line was up marginally, the seasonally adjusted figures experienced a dip of similar, and minimal, proportions.
The trend in housing starts came in flat for the month, landing at 244,507 units. That was a gain of just 0.8 per cent from 242,552 units in July. Meanwhile, the monthly seasonally adjusted annual rate (SAAR) of total housing starts for all areas in Canada decreased one per cent, to 252,787 units, which was lower than the 255,232 units reported in July.
The trend measure is a six-month moving average of the monthly SAAR of total housing starts for all areas in Canada. CMHC uses the trend measure as a complement to the monthly SAAR of housing starts to account for considerable swings in monthly estimates and to obtain a clearer picture of upcoming new housing supply.
“While both the SAAR and trend in housing starts were flat relative to the previous month, total housing starts are under pressure in 2023, except in Ontario and British Columbia,” stated Bob Dugan, CMHC’s chief economist. “The one bright spot in Canada has been multi-unit starts which have helped offset significant declines recorded in single-detached starts in all provinces this year. Market intelligence suggests multi-unit projects started during the busy summer months were likely financed a few months prior, so the full effect of higher interest rates on construction activity remains to be seen.”
The monthly SAAR for total urban centres with populations of 10,000 and over also saw housing starts decrease by about one per cent, with 233,075 units recorded in August. Multi-unit urban starts decreased by a per cent to 191,250 units, while single-detached urban starts increased two per cent to 41,825 units in August.
Total SAAR housing starts were down 12 per cent in Vancouver and 20 per cent in Toronto in August, while Montreal recorded an increase of 41 per cent, driven by a 48 per cent increase in multi-units.
According to CMHC tracking, Toronto and Vancouver have been performing well this year compared to last. In August, actual 2023 year-to-date housing starts were 28 and 47 per cent higher, respectively, than the same period in 2022. As a result, Ontario and British Columbia are the only provinces with positive year-to-date housing starts in Canada.