housing starts

National housing starts trend higher in April

Thursday, May 11, 2017

Housing starts are trending upward at 213,768 units in April 2017, compared to 210,702 units in March, according to Canada Mortgage and Housing Corporation (CMHC). The trend measure is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts.

“New housing construction increased in Canada, with seasonally adjusted data exceeding 200,000 units for five months in a row,” said Bob Dugan, CMHC’s chief economist, in a press release. “The increase in the trend was mainly due to apartment construction in British Columbia and Quebec, which was partly offset by a decline in Ontario’s multiple starts.”

In Halifax, apartment construction continues to drive the residential market. In April, over 400 additional multiple starts broke ground, bringing year-to-date multiples starts growth to 169 per cent, compared to last year. Demand is partly due to downsizing baby boomers that are choosing to sell their homes and move into rental units.

In the province of Quebec, the rate of housing starts fell in April, but the total for the first four months of 2017 was up by about 30 per cent in the province’s urban centres. This was mainly due to the significant number of apartments being constructed, especially rental units, in the Montreal and Quebec areas. In addition, single-detached home starts have been strong this year, partly due to tightening resale market conditions.

Despite the slight decline in Gatineau housing starts in April, the region showed positive results for the first four months of 2017. Increases in Gatineau were particularly strong in the rental segment, with construction commencing on many seniors’ housing units. Overall, starts were supported by climbing housing demand and a decrease in the number of unsold units, both new and existing.

The trend in Toronto’s housing starts remained stable in April, as small increases in low-rise homes were offset by declines in apartment starts. Overall, new home construction this year has been gaining speed as both new single-detached and townhome starts trended higher to reach a nine-year high in April. Tight conditions in the resale market continue to cause demand to shift to the new home market.

London’s single-detached starts were significantly higher in April 2017 compared to the year before and the ten-year average for the month. The difference between house prices in Toronto and London has widened significantly, making new single-detached homes in London more appealing to retirees who want to sell their Toronto home but not sacrifice on space.

In Winnipeg, a decrease in inventories in the new home market and balanced resale market conditions are allowing builders to increase production. The number of actual housing starts in April climbed year-over-year for the fourth consecutive month, boosting year-to-date starts to their highest levels since 1987.

The trend measure for Kelowna housing starts climbed in April, due to an increase in both single-detached and multi-unit construction. Particularly, several large apartment rental projects are now under construction as builders continue to respond to the low vacancies that have plagued the region’s rental market for the past two years.

Housing starts in Metro Vancouver trended higher for the first time in four months, led by multi-unit residential construction. Builders are responding to the high demand in the market, as approximately 80 per cent of townhomes and 100 per cent of apartments were sold at completion during the last two months.

The standalone monthly SAAR of housing starts for all regions of Canada was 214,098 units in April, compared to 252,305 units in March. The SAAR of urban starts fell by 15.3 per cent in April to 199,485 units. Multiple urban starts decreased by 16.7 per cent to 134,314 units, while single-detached urban starts dropped by 12.1 per cent to 65,171 units.

Rural starts were estimated at a SAAR of 14,613 units.

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