Canadian Housing Starts Trend Increases in November

Canadian Housing Starts Trend Increases in November

The natonal trend in housing starts increased in November, following four consecutve months of decline. While single-detached starts contnued to trend lower in November, this was more than ofset by a gain in the trend of mult-unit starts following several months of weakness.

The trend in housing starts was 210,038 units in November 2018, compared to 206,460 units in October 2018, according to Canada Mortgage and Housing Corporaton (CMHC). This trend measure is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts.

Monthly Highlights

Total housing starts in the Vancouver Census Metropolitan Area (CMA) contnued trending lower in November 2018. The majority of November’s starts were concentrated in the cites of Vancouver and Surrey, which together accounted for a third of total starts in the CMA. Year-to-date, total housing starts in the Vancouver CMA have decreased nine per cent compared to the same period in 2017.

The trend measure for housing starts actvity in the Kelowna CMA increased in November due, in large part, to a signifcant increase in mult-unit constructon for the month. In partcular, new apartment condo and rental projects bolstered housing starts in November.

The seasonally adjusted annual rate of housing starts in November tcked up in Calgary compared to October largely due to gains in row and apartment units. The underlying trend, however, has been moving lower in the last three months, which can be partally atributed to moderatng employment growth and elevated inventory levels.

In the Winnipeg CMA, the trend in total housing starts in November increased from the previous month. The upward trend in mult-family starts in November was mainly due to the increase in apartment units, which was enough to off set the decrease in row units.

Total housing starts during November trended to its highest level so far in 2018, mainly due to a surge in
condominium apartment starts. The downward trend in single-detached homes persisted in November as a result of fewer new home sales in the year prior. Fewer site openings and high prices have curtailed sales of single-detached homes in recent years.

Total housing starts trended higher as the Oshawa CMA saw the most starts for the month of November in almost three decades. Strong mult-unit starts, partcularly in the City of Oshawa, ofset the decline in the single-detached starts trend. Higher house prices contnue to increase the popularity of relatvely more afordable higher density  housing.

While total housing starts in Hamilton trended down for the second consecutve month in November, they remained at an elevated level due to strength in the row and apartment segments. Row starts are outperforming in Hamilton because they atract buyers that can aford an average priced home. A number of those buyers chose to purchase a new row home rather than a resale single-detached home listed at the same price point, as most single-detached homes in that price range were in need of signifcant updatng.

The trend measure of total housing starts contnued its climb to the highest level in 2018. Growth this month came from a jump in apartment starts as well as steady single-detached starts. This year’s rally in housing starts coincided with low supply conditons in the existng home market, leading to additonal demand for new homes.

Québec CMA
From January to November 2018, housing starts in the Québec metropolitan area were down by 25% from the same period in 2017. Residental constructon has been more moderate this year, mainly on account of a slowdown in the condominium segment. The year should end with slightly fewer new rental housing units, even though actvity has remained relatvely signifcant. Supply has been stmulated by certain factors favouring demand for apartments, including migraton and the aging populaton.

From January to November 2018, housing starts in the Sherbrooke CMA saw an increase of 15% over the same period in 2017. This strong residental constructon was mainly supported by signifcant growth in the conventonal rental housing segment, which was stmulated by decreases in the vacancy rate in 2017 and 2018. Overall, the rise in full-tme employment and migraton should contnue to support housing demand over the coming months.

New Brunswick
New Brunswick’s total housing starts in November 2018 were 14% higher compared to the same month last year. The increase was due to a 31% rise in mult-unit housing starts while single-detached starts were down 9% compared to November 2017. Mult-unit constructon is being driven by increased demand from recent record immigraton levels and intra-provincial migraton to major centres. A relatvely healthy resale market is also enabling seniors to move from homeownership to rental.

Prince Edward Island (PEI)
Total housing starts in PEI were 93% higher in November compared to a year ago. Singles increased by 17% and multples by 133%, which contributed directly to the signifcant monthly gain. This was the result of new mult-unit apartment projects under development. Year-to-date, total starts are trending 14% higher, driven primarily by solid employment growth.

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Provided by: CMHC


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