Canadian Housing Starts Trend Held Steady in January

The trend in housing starts was 208,131 units in January 2019, compared to 207,171 units in December 2018, according to Canada Mortgage and Housing Corporation (CMHC). This trend measure is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts.

"After recent declines, the national trend in housing starts held steady in January and remained above historical average," said Bob Dugan, CMHC's chief economist. "While single-detached starts continued to trend lower in January, this was offset by an uptick in the trend for multi-unit dwellings in urban centres.

Monthly Highlights

Vancouver

The trend measure for housing starts in the Vancouver Census Metropolitan Area (CMA) held steady in January 2019 after trending lower in the second half of 2018. The majority of January’s starts were concentrated in the apartment condominium segment in the cities of Vancouver and Burnaby, which together accounted for over half of new construction activity for the month.

Kelowna

Total housing starts trended sharply upward in Kelowna for January. Condominium units in the city of Kelowna were the largest share of the uptick with larger projects breaking ground in the first month of 2019. This continued a trend of elevated multi-family construction in the region. However, single detached units also increased slightly.

Lethbridge

Total starts in Lethbridge trended higher in January 2019 compared to the previous month mainly due to the increase in single-detached starts. Multi-family starts declined marginally as the decrease in both row and apartment starts was partially offset by the increase in semi-detached starts.

Saskatoon

The trend measure of total housing starts edged higher in the first month of 2019. Nonetheless, actual total housing starts in January were down 15%, compared to January 2018. The reduction in building activity was entirely due to a sharp decline in multi-family construction while single-detached starts began the year on stronger footing.

Toronto

Toronto CMA total housing starts trend was unchanged from the previous month. Single and semi-detached homes along with condominium apartment starts trended lower. Row starts, conversely, trended significantly higher as strong pre-construction sales towards the latter part of 2018 converted into housing starts. Rising borrowing costs kept pre-construction sales of new homes low, particularly low-rise throughout 2018.  As a result, expect to see even fewer units breaking ground during 2019.

London

Total housing starts in London CMA trended higher due to increased apartment construction while single detached and rows homes starts continuing their downward trend. An increasing number of completed but unsold new single-detached homes resulted in fewer single-detached starts; as builders were able to satisfy demand from existing inventories.

Ottawa

Ottawa housing starts trended lower for all dwelling types in the first month of 2019. Starts this January marked the lowest for the month in over two decades. The number of units under construction in January was historically high, leaving homebuilders with fewer resources to commit to new construction.

Gatineau

In January 2019, housing starts trended lower for the second month in a row for the Gatineau area. However, the number of new rental housing units remains at a high level, as the aging of the population and the low vacancy rate continue to stimulate starts for this type.

Québec CMA

Housing starts activity started off slowly in the Québec CMA, as a result of a decrease in multi-unit segment. Despite this slowdown in January, multi-unit—especially rental—housing construction should stay relatively strong this year. Activity in this market segment is being stimulated in particular by migration and the aging of the population.

New Brunswick

In January 2019, New Brunswick’s total housing starts were 33% higher compared to a year ago. The increase was due to multiple-unit starts, which were more than double the number observed in January 2018. On the other hand, construction of single-detached housing has been on a downward trend and the number of starts in January was the lowest for the month in 20 years.

CMHC uses the trend measure as a complement to the monthly SAAR of housing starts to account for considerable swings in monthly estimates and obtain a more complete picture of Canada’s housing market. In some situations analyzing only SAAR data can be misleading, as they are largely driven by the multi-unit segment of the market which can vary significantly from one month to the next.

The standalone monthly SAAR of housing starts for all areas in Canada was 207,968 units in January, down from 213,630 units in December. The SAAR of urban starts decreased by 2.1% in January to 190,912 units. Multiple urban starts increased by 0.7% to 146,353 units in January while single-detached urban starts decreased by 10.4% to 44,559 units.

Rural starts were estimated at a seasonally adjusted annual rate of 17,056 units.

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Provided by: CMHC