Housing starts reverse recent trend
By Adam FreillConstruction Residential
CMHC reports record month-to-month increase in SAAR for Canadian housing starts in June.
Canada’s recently declining trend in housing starts reversed course in June, reports Canada Mortgage and Housing Corporation (CMHC). The trend hit 234,974 units in June, up 2.4 per cent from the 229,520 units indicated in May’s trend line.
That line had been on a decline for several months leading into the latest starts report, which was helped by a significant increase in actual housing starts in June. The trend measure is a six-month moving average of the monthly seasonally adjusted annual rate (SAAR) of total housing starts for all areas in Canada.
The SAAR of total housing starts for all areas in Canada increased 41 per cent in June, putting it at 281,373 units. That’s a significant jump from the 200,018 units in the May SAAR figures. It is also the largest month-to-month SAAR change in the past 10 years. Multi-unit starts accounted for most of the increase, and roughly 82 per cent of total starts.
The monthly SAAR of total urban starts, for centres with populations of 10,000 and more, increased 46 per cent, with 262,815 units recorded in June. Multi-unit urban starts increased 59 per cent, to 219,914 units, while single-detached urban starts increased three per cent, to 42,901 units.
The CMAs of Vancouver and Toronto recorded significant increases in total SAAR housing starts in June. Vancouver was up 71 per cent, and Toronto doubled its May figures. Combined, Toronto and Vancouver accounted for 47 per cent of total housing starts in Canada’s urban centres for the month of June.
The CMA of Montreal also recorded an increase in total SAAR housing starts, although it was less pronounced, coming in eight per cent higher than May. All three CMAs recorded increases in both single-detached and multi-unit starts.
“We observed a large increase in the SAAR of housing starts in June which pushed the trend of housing starts upward after consecutive monthly declines since November 2022,” stated Bob Dugan, CMHC’s chief economist. “Despite this, total year-to-date housing starts for the first half of the year were eight per cent lower than they were over the same period in 2022 as the high interest rate environment continues to challenge housing starts through increasing borrowing costs.”
Although national year-to-date starts are still behind the 2022 figures, Toronto and Vancouver have been doing considerably well this year compared to last, with actual 2023 year-to-date housing starts 32 and 49 per cent higher than the same period in 2022 in Toronto and Vancouver respectively.