Ottawa – Urban and rural housing starts are trending up from a year ago, according to reports from Canada Mortgage and Housing Corporation.
The trend in housing starts was 216,362 units in May 2018, compared to 225,481 units in April 2018, said the latest report from CMHC.
Rural starts were estimated at a seasonally adjusted annual rate of 17,412 units. This is up from 16,145 in May 2017.
This trend measure is a six-month moving average of the monthly seasonally adjusted annual rates of housing starts, CMHC said in a news release.
“In May, the national trend in housing starts declined following several months of stability,” said Bob Dugan, CMHC’s chief economist. “This reflects a decline in multi-unit urban starts in May that leaves them close to their 10-year average following several months of historically elevated levels.”
This number is up from 214,621 reported in May 2017.
Monthly Highlights
Vancouver
The trend measure for housing starts held steady in May 2018, as the elevated pace of new home construction continued in the Vancouver Census Metropolitan Area. Increased activity is particularly evident in the multi-family segment, where housing starts have increased nine per cent so far this year.
Victoria
Langford led the Metro Victoria housing starts in May with an uptick in condo construction. Overall, the trend in total housing starts increased six per cent from the previous month and year-to-date (YTD) total starts were up 34 per cent. Rental construction remains the largest driver of housing starts in the Metro area, while single-detached units are down 15 per cent YTD.
Saskatoon
The trend measure of total housing starts rose in May as a slowdown in single-detached starts was countered by a much faster pace of multi-family construction. The sharp gains in multi-family starts can largely be attributed to a purpose-built rental apartment project that got underway in May. After five months in 2018, multi-family starts in Saskatoon were up by 63 per cent, compared to the same period of 2017.
Toronto
Total housing starts in the Toronto CMA trended lower in May, primarily driven by lower trending apartment and townhome starts. A better supplied resale market and higher borrowing costs continued to weigh down on demand for new homes, particularly for single-detached units. Fewer new home sales have ensued since 2017 and consequently fewer homes were started.
Brantford
Brantford housing starts trended up in May, as overall starts continued to be driven by single-detached starts. Despite moderating prices in nearby Hamilton, some Hamilton buyers continue to make purchases in Brantford’s more affordable new single-detached home market.
Windsor
The housing starts trend fell by 14% in May, which was the sixth consecutive month of decline in the Windsor CMA. This month’s decline reflected a lower number of multi-unit starts, with apartment starts contributing the most. The recent slowdown in housing starts coincided with a moderation in existing home market activity, which has come off record highs as the effect of GTA buyers waned.
Kingston
Housing starts in Kingston trended higher for the third consecutive month, owing to an increase in the trend for both single-detached and multi-unit housing starts. These new projects are helping to address a shortage of homes in the resale market, as the number of new listings had plunged to the lowest level since March 2005.
Sherbrooke
In May 2018, the housing starts trend in the Sherbrooke CMA was relatively stable. Compared to last year, in the first five months of this year, conventional rental housing starts were up, stimulated by the decrease in the vacancy rate in 2017.
New Brunswick
Housing starts in New Brunswick dropped 10% in May 2018 compared to the same month last year to continue a trend of lower housing starts so far in 2018. A significant decline in multiples has contributed to a 26 per cent decline in New Brunswick’s total housing starts year-to-date.
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 seasonally adjusted annual rate (SAAR) of housing starts for all areas in Canada was 195,613 units in May, down from 216,775 units in April.
The SAAR of urban starts decreased by 11.1 per cent in May to 178,201 units. Multiple urban starts decreased by 16.4 per cent to 119,811 units in May while single-detached urban starts increased by two per cent to 58,390 units.
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