The standalone monthly seasonally adjusted annual rate (SAAR) of total housing starts for all areas in Canada declined 13 per cent in January (215,365 units) compared to December (248,296 units), according to a report released Wednesday by Canada Mortgage and Housing Corporation (CMHC).
The SAAR of total urban starts declined 16 per cent, with 191,491 units recorded in January. Multi-unit urban starts declined 20 per cent to 146,267 units, while single-detached urban starts increased three per cent to 45,224 units.
The rural starts SAAR estimate was 23,874 units.
Aled ab Iorwerth
The trend in housing starts was 259,412 units in January, down four from 269,781 units in December. The trend measure is a six-month moving average of the monthly SAAR of total housing starts for all areas in Canada, said the CMHC.
“Both the Monthly SAAR and the six-month trend of housing starts declined nationally in the first month of 2023, with SAAR of housing starts hitting its lowest level since September 2020. Among Toronto, Montreal and Vancouver, Montreal was the only market with increases in total SAAR housing starts in January, up 36 per cent. Toronto declined 52 per cent while Vancouver declined 14 per cent, which contributed to the overall monthly decline in SAAR housing starts for Canada,” said Aled ab Iorwerth, CMHC’s Deputy Chief Economist.
Rishi Sondhi, Economist, TD Economics, said January’s level of starts was well below expectations and the decline was broad-based and came despite some indications of warmer weather during the month.
“Zooming out, while January’s decline was concentrated in multi-family units, single-family starts have been weaker on a trend basis over the past few months. This may indicate that last year’s outsized weakness in single-detached sales is bleeding over into homebuilding activity. All of that said, we would expect some bounce back in February after last month’s outsized drop,” he said.
“Media reports indicate that the foreign buying ban (implemented in January), may have unintentionally made it harder to build new housing, although it’s unclear whether this factor was at play in January’s weaker-than-expected result.
After a strong performance in 2022, our forecast anticipates starts trending lower this year, as past declines in demand restrain construction activity.”
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