The six-month trend in housing starts decreased 1.9% from 246,972 units in August to 243,759 units in September. The trend measure is a six-month moving average of the seasonally adjusted annual rate (SAAR) of total housing starts for all areas in Canada, reported Canada Mortgage and Housing Corporation on Wednesday.
The total monthly SAAR of housing starts for all areas in Canada increased 5% in September (223,808 units) compared to August (213,012 units), said the federal agency.
In Canada’s urban centres with a population of 10,000 or greater, there have been 168,897 actual housing starts year-to-date (January – September) in 2024. This compares to 165,559 for the same period in 2023, meaning actual housing starts are currently 2% higher this year, said the report.
Kevin Hughes
“Growth in actual year-to-date housing starts has been driven by both higher multi-unit and single-detached units in Alberta, Quebec and the Atlantic provinces. By contrast, year-to-date starts in Ontario and British Columbia have decreased across all housing types. Despite the increase in housing starts in September, we remain well below what is required to restore affordability in Canada’s urban centres.” said Kevin Hughes, CMHC’s Deputy Chief Economist.
Key Facts:
- The monthly SAAR of total urban (centres 10,000 population and over) housing starts was 6% higher (210,002 units). Multi-unit urban starts increased 6% (163,400 units), while single-detached urban starts increased 5% (46,602 units).
- The rural starts monthly SAAR estimate was 13,806 units.
- Actual year-to-date housing starts between January and September 2024 are up 15% in Montreal from the same period last year, showing some recovery from historically low new home construction in 2023.
- In Vancouver, actual starts are down 19% in 2024 compared to 2023, but it’s important to note 2023 was a record high year.
Rishi Sondhi, Economist with TD Economics, said in the third quarter, urban starts averaged 223.8k units, down slightly from second quarter levels.
“This points to a modest negative contribution from this source to residential investment and overall economic growth,” said Sondhi.
“On a trend basis, starts continued to run at a reasonably elevated pace last month, supported by construction of purpose-built rental units. However, the trend is clearly cooling, as condo starts have pulled back to a significant degree. Weak pre-sales activity in key markets like Toronto suggests that this latter trend will be maintained, underpinning our view that Canadian housing starts will decline next year. That said, solid activity in Alberta will help mitigate the extent of the decline.”
Andrew Grantham, Senior Economist with CIBC Capital Markets, said Canadian housing starts perked up modestly following a deceleration in the prior month, but remain well below levels needed to catch back up with recent population growth.
“The 224K pace in September was slightly below the consensus forecast (235K), albeit up from a revised 213K in the prior month. It compares to a near 250K average pace during the first half of the year, showing that just when the Canadian economy needed starts to accelerate and catch up with population growth, they are actually doing the opposite. The impact of past interest rate hikes on starts, through lower presales and higher construction costs, may take a while to unravel, and we don’t expect a sustained acceleration in homebuilding until the second half of next year and into 2026,” he said.
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. He was also named by RETHINK to its global list of Top Retail Experts 2024.
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