The national trend in housing starts continued its downward path in August compared to the historical peak recorded in March 2018, reports Canada Mortgage and Housing Corporation (CMHC). This moderation brings total housing starts closer to historical averages, largely due to recent declines in the trend of multi-unit starts from historically elevated levels earlier this year.
The trend in housing starts was 214,598 units in August 2018, compared to 219,656 units one month before. This trend measure is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts.
Highlights by Census Metropolitan Area (CMA):
In Vancouver, housing starts trended higher in August 2018 as more multi-family projects were started across the region. The cities of Vancouver and Burnaby led the way and accounted for over half of the region’s housing starts during the month due to a number of new condominium apartment projects. There continues to be a strong demand for housing from Vancouver residents, resulting in the pace of new home construction so far this year moving ahead of the level recorded during the same period in 2017.
Despite August being a very strong month for housing starts in Kelowna, the first eight months of this year have seen a decline of 29 per cent in the single-detached segment and 28 per cent in the multi-unit segment, relative to the record amount of housing construction seen in 2017. Despite this decline in construction activity, the pace of housing starts in 2018 remains well above the 10-year average.
The trend measure for housing activity in the Edmonton CMA climbed significantly in August, driven by an increase in new construction of multi-unit dwellings. Despite the rebound in construction activity last month, housing starts in the first eight months of 2018 remain approximately seven per cent below the pace of activity of the same period in 2017, as builders deal with raised inventories of completed and unsold units.
In Winnipeg, total housing starts trended higher for the second month in a row. Total housing starts increased by almost a third in August 2018 compared to August 2017, due to an increase in both condominium and rental apartment construction. Declining inventories have supported new construction.
Toronto’s total housing starts trended lower in August 2018, mainly due to fewer condominium apartment and single-detached home starts. Rising prices and land constraints have slowed sales of pre-construction single-detached units over the past several years, resulting in fewer single-detached starts to date in 2018, when compared to the same period in 2017. However, strong pre-construction sales of condominium apartments over the past couple of years have led to a higher level of condo starts so far in 2018, despite the pull-back in August.
In Oshawa, total housing starts trended higher in August 2018, due to higher trending multi-family starts, especially row units. August recorded the most actual row unit starts for the month in nearly three decades. Although demographic and economic conditions remain favourable, higher home prices in Toronto and the surrounding regions continue to increase the popularity of comparatively more affordable higher density housing in Oshawa.
Although housing construction in Windsor was slow during the first half of 2018, it continues to rebound now. The trend in new housing construction grew for the third consecutive month, due in large part to greater multi-unit construction. Year-to-date housing starts fell 27 per cent compared to the same period last year, as 2017’s active housing market eased.
In Kingston’s CMA, the August trend in total housing starts fell slightly for the first time in five months, however, it remained close to the high level experienced over the past year. This strength follows a strong year for housing starts in 2017 and a healthy 2018 so far. Demand has likely been supported by the relative affordability of all home types in Kingston, compared to other Ontario CMAs.
August 2018 saw Saguenay’s year-to-date housing starts rise compared to the same period last year. However, the trends differed depending on the market. In the freehold (single- and semi-detached) housing segment, an increase in housing starts was recorded. Meanwhile, conventional rental housing construction fell, especially due to a relatively high vacancy rate and net migration deficit.
Although construction activity for single-detached homes in Halifax remained stable on an annual basis, multiples starts this month have more than doubled last year’s levels. So far in 2018, multiples construction has outpaced the same period last year by seven per cent, with rental market demand continuing to be impacted by growth in international and interprovincial migration into the Halifax region.
The trend in total housing starts rose in August in New Brunswick. Construction of multi-unit buildings has increased by 13 per cent so far this year. Single housing starts were the highest for the month of August since 2015, and have increased by nine per cent so far this year.