The standalone monthly seasonally adjusted annual rate (SAAR) of total housing starts for all areas in Canada increased 13 per cent in February (243,959 units) compared to January (216,514 units), reported Canada Mortgage and Housing Corporation (CMHC) on Wednesday.
Max Rahubovskiy
The monthly SAAR of total urban (centres 10,000 population and over) starts increased 16 per cent, with 222,663 units recorded in February. Multi-unit urban starts increased 18 per cent to 173,745 units, while single-detached urban starts increased eight per cent to 48,918 units, said the report.
The rural starts monthly SAAR estimate was 21,296 units.
The trend in housing starts was 255,735 units in February, down two per cent from 259,830 units in January. The trend measure is a six-month moving average of the monthly SAAR of total housing starts for all areas in Canada, said the federal agency.
Bob Dugan
“After hitting its lowest level since September 2020, the monthly SAAR of housing starts rebounded in February, while the six-month trend declined slightly. Among Toronto, Montreal and Vancouver, only Toronto recorded an increase in total SAAR housing starts in February, up 55%. Montreal declined 31% and Vancouver declined 43%. February’s housing starts provided much needed new housing supply nationally, but in order to improve affordability, we need to find innovative ways to deliver more supply and to keep building at a higher pace,” said Bob Dugan, CMHC’s Chief Economist.
Rishi Sondhi, Economist, TD Economics, said starts rebounded as expected in February after an outsized January decline that was driven by the volatile multi-family sector.
“Several factors remain supportive for homebuilding, including cooling cost pressures for several key inputs like lumber and low inventory levels,” he said.
“Still, the pace of starts has moderated, and figures to move even lower moving forward as past declines in demand weigh on homebuilding. We are likely seeing some evidence of this already, with single-family starts pulling back to a relatively large extent in recent months. This is consistent with outsized sales weakness in this category last year.”
Douglas Porter, Chief Economist, BMO Economics, said national starts appear to be drifting lower amid the cool-down in sales and prices. “The latest monthly result is almost seven below the 12-month average (of 261k), and we look for starts to average about 230,000 this year,” he said.
“The reset in interest rates over the past year has blown off some of the pandemic era froth in Canada’s housing market, but there are signs that sales activity and prices may be close to a nadir. The recent sudden plunge in global bond yields, alongside the Bank of Canada’s step to the sidelines, look to provide some support for housing, as does the ongoing job market strength. We’re not looking for any swift recovery in housing, however, as the deep drop in interest rates is in part driven by a darkening outlook for the broader global economic outlook. What milder interest rates will give to housing, slower economic activity will at least partly take away,” added Porter.
(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 worked for 35 years at the Calgary Herald, covering sports, crime, politics, health, faith, city and breaking news, and business. He works as well as a freelance writer for several national publications and as a consultant in communications and media relations/training. Mario 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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