The total monthly seasonally adjusted annual rate (SAAR) of housing starts for all areas in Canada increased 14% in February (253,468 units) compared to January (223,176), according to a report released Friday by Canada Mortgage and Housing Corporation (CMHC).
MART PRODUCTION
The six-month trend in housing starts increased from 244,638 units in January to 245,665 units in February for a slight 0.4% gain. The trend measure is a six-month moving average of the SAAR of total housing starts for all areas in Canada, said the federal agency.
“The actual number of housing starts across Canada in urban centres of 10,000 population and over was up 11% to 17,495 units in February compared to 15,822 units in February 2023. The year-over-year increase was driven solely by higher multi-unit starts, up 16%. Single-detached starts decreased 14% in February,” it said.
February’s actual housing starts were 10% and 82% higher year-over-year in Toronto and Vancouver, respectively, because of higher multi-unit starts, while single-detached starts decreased. Montreal’s actual starts decreased 9%, as both housing segments were lower, added the CMHC.
Bob Dugan
“Following two consecutive monthly declines, both the SAAR and Trend of housing starts increased in February. This was due to growth in actual year-over-year starts, driven by higher multi-unit starts, particularly in Toronto and Vancouver. As the national housing shortage continues, the focus for developers continues to shift towards multi-unit construction in Canada’s major centres,” said Bob Dugan, CMHC’s Chief Economist.
Rishi Sondhi, Economist with TD Economics, said a bounce back in starts was anticipated in February after January’s decline.
“However, they continue to trend at a solid level, supported by rising construction of purpose-built rental units and elevated home prices,” said Sondhi.
“In the first two months of Q1, housing starts are below their fourth quarter level, suggesting some potential downward pressure on residential investment growth in the first quarter. And, we think they’ll head lower as the year progresses, with past weakness in home sales filtering through into homebuilding.”
Katherine Judge, Senior Economist at CIBC Capital Markets, said some of the increase is likely being helped by the atypically mild winter weather seen this year, which could also be supporting activity in the resale market, along with optimism for BoC rate cuts later this year.
“Homebuilding is still likely to show a modest retreat in Q1 overall, but the drag on GDP growth from residential investment will be limited by the increase in resale activity,” she 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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