Housing starts fall off in May
By Adam FreillConstruction Residential
Higher construction and borrowing costs take a toll on multi-unit starts, although figures remain in historically high territory.
Despite a need of new and affordable housing, Canada’s housing starts took a major hit in May, according to the latest data released by Canada Mortgage and Housing Corporation (CMHC). The standalone monthly seasonally adjusted annual rate (SAAR) of total housing starts for all areas in Canada declined 23 per cent, coming in at 202,494 units, well behind the 261,357 units reported in April, but remaining above the 200,000 plateau traditionally seen as historically elevated.
The CMAs of Vancouver, Toronto, and Montreal all recorded declines in total SAAR housing starts in May, with Vancouver down 45 per cent, Toronto off by 28 per cent, and Montreal 35 per cent lower for the month. All three recorded increases in single-detached starts that were offset by large decreases in multi-unit starts.
The monthly SAAR of total urban starts for centres with a minimum population of 10,000 declined 24 per cent, with 182,842 units recorded in May. Multi-unit urban starts declined 30 per cent to 139,890 units, while single-detached urban starts increased six per cent to 42,952 units.
“The decline in housing starts is due to constraints in new construction, including labour shortages and higher construction and borrowing costs, which is considerably affecting multi-unit starts,” stated Bob Dugan, CMHC’s chief economist. “Despite this, starts have only declined to the relatively high levels observed prior to 2020.”
Canada’s housing starts trend has been declining steadily since November 2022. In May, the trend fell to 230,205 units, a 4.2 per cent dip from April’s 240,318 units. The trend measure is a six-month moving average of the monthly SAAR of total housing starts for all areas in Canada.