The standalone monthly SAAR (seasonally adjusted annual rate) of total housing starts for all areas in Canada declined 11% in October (267,055 units) compared to September’s 2022 high (298,811 units), according to a report released Wednesday by Canada Mortgage and Housing Corporation.
The SAAR of total urban starts also declined, down 11% to 245,234 units in October. Multi-unit urban starts decreased 13% to 188,189 units, while single-detached urban starts fell 4% to 57,045 units, said the CMHC.
Rural starts were estimated at a seasonally adjusted annual rate of 21,821 units, it added.
“Monthly SAAR declined in October, while the six-month trend in housing starts slightly increased. October’s decrease in monthly SAAR housing starts in Canada’s urban areas was driven by both lower multi-unit and single-detached starts. Among Montreal, Toronto and Vancouver, Montreal was the only market to post an increase in total SAAR housing starts, driven by a 19% increase in multi-unit activity. Toronto, down 47% and Vancouver, down 19%, contributed to the overall monthly decline in SAAR housing starts for Canada. Despite this, Housing starts activity remains elevated in Canada in 2022,” said Bob Dugan, CMHC’s Chief Economist.
The trend in housing starts was 277,667 units in October, up 0.5% from 276,374 units in September, said the CMHC, adding that the trend is a six-month moving average of the monthly seasonally adjusted annual rates of housing starts.
“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 clearer picture of upcoming new housing supply. In some situations, analyzing only SAAR data can be misleading, as the multi-unit segment largely drives the market and can vary significantly from one month to the next,” said the federal agency.
Rishi Sondhi, Economist with TD Economics, said starts continue to run at a healthy level, buoyed by elevated prices and low levels of unsold new home inventories.
“However, they declined in October, which fits with our view calling for a decline in Q4 residential investment. And, the recent downtrend in permit issuance suggests that more of the same could be in store moving forward. Such an outcome would be consistent with our forecast calling for a moderation in the pace of starts in 2023, as higher interest rates and past declines in demand weigh on homebuilding.”
(Mario Toneguzzi is a veteran of the media industry for more than 40 years and named in 2021 a Top Ten Business Journalist in the world and only Canadian)
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