The trend measure is a six-month moving average of the monthly SAAR of total housing starts for all areas in Canada, it said.
The monthly seasonally adjusted annual rate (SAAR) of total housing starts for all areas in Canada decreased 1% in August (252,787 units) compared to July (255,232 units), added the CMHC.
“While both the SAAR and trend in housing starts were flat relative to the previous month, total housing starts are under downward pressure in 2023, except in Ontario and British Columbia. The one bright spot in Canada has been multi-unit starts which have helped offset significant declines recorded in single-detached starts in all provinces this year. Market intelligence suggests multi-unit projects started during the busy summer months were likely financed a few months prior, so the full effect of higher interest rates on construction activity remains to be seen,” said Bob Dugan, CMHC Chief Economist.
The report said the monthly SAAR of total urban (centres 10,000 population and over) housing starts decreased 1%, with 233,075 units recorded in August. Multi-unit urban starts decreased 1% to 191,250 units, while single-detached urban starts increased 2% to 41,825 units in August.
“Total SAAR housing starts were down 12% in Vancouver and 20% in Toronto in August, while Montreal recorded an increase of 41%, driven by a 48% increase in multi-units. The rural starts monthly SAAR estimate was 19,712 units,” added the CMHC.
Rishi Sondhi, Economist with TD Economics, said starts continue to run at a healthy clip that’s roughly 20% above pre-pandemic norms, highlighting the resilience of homebuilding in the face of higher interest rates and labour shortages.
“Past gains in demand are driving homebuilding, with support coming from elevated prices and low levels of unsold inventories. Moving forward, we think that starts will trend lower towards the end of this year and into 2024, as last year’s weakness in home sales filters through to residential construction activity. That said, the federal government and several provinces’ decision to drop the GST/HST on purpose-built rental construction could lift activity going forward,” said Sondhi.
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