The six-month trend in housing starts was higher in November at 257,777 units, up 0.7% from 255,876 units in October, according to a report released Friday by Canada Mortgage and Housing Corporation (CMHC).
Ketut Subiyanto
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 monthly SAAR of total housing starts for all areas in Canada decreased 22% in November (212,624 units) compared to October (272,264 units), said the federal agency.
The monthly SAAR of total urban (centres 10,000 population and over) housing starts decreased 23%, with 195,363 units recorded. Multi-unit urban starts decreased 27% to 151,297 units, while single-detached urban starts decreased 7% to 44,066 units, said the CMHC, adding that total SAAR housing starts were down 30% in Montreal and 39% in both Toronto and Vancouver, driven by significant declines in multi-unit starts. The rural starts monthly SAAR estimate was 17,261 units.
Kevin Hughes
“The notable drop in the rate of housing starts in November, particularly in the multi-unit space, should not come as a major surprise and reflects tighter economic conditions impacting construction timelines. As the more difficult borrowing conditions and labour shortages now seem to be showing in the starts numbers, we can expect to see continued slower starts rates in the coming months,” said Kevin Hughes, CMHC’s Deputy Chief Economist.
Rishi Sondhi, Economist with TD Economics, said some payback was in store for starts after October’s surprisingly sturdy print.
“That said, they still remain at solid levels on a trend basis, supported by condo construction (reflecting past gains in pre-sales) and purpose-built rental units (boosted by skyrocketing rents and government programs), ” said Sondhi.
“Today’s data is consistent with our view that starts will trend lower moving forward, as past weakness in home sales flow through to new supply. However, we’re anticipating some bounce-back took place in December, consistent with rising permit issuance in recent months. Government actions (such as eliminating the GST on purpose-built rental building) coupled with robust population growth will likely keep the level of starts elevated through 2024, even with the anticipated downtrend.”
Mario Toneguzzi
Mario Toneguzzi is Managing Editor of Canada’s Podcast. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list
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