developer housing starts

National housing starts trend rises in November

Wednesday, January 2, 2019

The trend in housing starts was 210,038 units in November 2018, up from 206,460 units in October 2018, 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.

“The national trend in housing starts increased in November, following four consecutive months of decline,” said Bob Dugan, CMHC’s chief economist, in a press release. “While single-detached starts continued to trend lower in November, this was more than offset by a gain in the trend of multi-unit starts following several months of weakness.”

In Vancouver, total housing starts continued trending down in November 2018. The majority of November’s housing starts were located in Vancouver and Surrey, which accounted for a third of total starts in the CMA when combined. Year-to-date, total housing starts in the Vancouver CMA have fallen nine per cent compared to the same period in 2017.

The Kelowna CMA experienced an increased trend measure for housing starts activity, due in large part to a significant increase in multi-unit construction in November. In particular, new condominium apartment and rental projects drove housing starts higher that month.

Calgary experienced a month-over-month increase in the seasonally adjusted annual rate (SAAR) of housing starts in November, largely because of gains in row and apartment units. The underlying trend, meanwhile, has been falling over the last three months, which can be partially due to moderating employment growth and elevated inventory levels.

In Winnipeg, the housing starts trend increased on a month-over-month basis in November. The climbing trend in multi-family starts that month was largely because of the increase in apartment units, which was enough to offset the decrease in row units.

Total housing starts in November trended to its highest level so far in 2018 in Toronto, mainly because of a surge in condominium apartment starts. The downward trend in single-detached homes remained in November due to fewer new home sales in the previous year. Fewer site openings and high prices have impacted sales of single-detached homes in recent years.

The Oshawa CMA saw total housing starts trend higher, as starts in the region were the highest for the month in almost three decades. Strong multi-unit starts, particularly in the City of Oshawa, offset falling single-detached starts trend. Higher home prices continue to drive the popularity of relatively more affordable higher density housing.

Although total housing starts in Hamilton trended down for the second month in a row in November, they remained at an elevated level due to strong row and apartment segments. The row segment is likely doing well because row houses attract buyers that can afford an average priced home, but buyers would prefer to purchase a new row house rather than a resale single-detached house in the same price point, as it would likely require upgrades.

The trend measure of total housing starts in the Windsor CMA continued its ascent to its highest level in 2018. November’s growth is attributed to an increase in apartment starts as well as steady single-detached starts. The improvement in housing starts in 2018 coincided with low supply conditions in the existing home market, resulting in additional demand for new homes.

From January to November 2018, housing starts in the Quebec CMA fell 25 per cent year-over-year. Residential construction was more modest in 2018, mainly due to a slowdown in the condominium segment. However supply has been stimulated by some factors that favour demand for apartments, including migration and the aging population.

The Sherbrooke CMA saw a 15 per cent annual increase in housing starts from January to November 2018, which was mainly supported by significant growth in the conventional rental housing segment, which was stimulated by decreases in the vacancy rate in 2017 and 2018. Overall, the increase in full-time employment and migration should continue to support housing demand in the coming months.

Total housing starts in New Brunswick in November 2018 were up 14 per cent compared to November 2017. The increase was due to a 31 per cent increase in multi-unit housing starts, while single-detached starts fell nine per cent year-over-year. Multi-unit construction is being driven by increased demand from recent record immigration levels and intra-provincial migration to major centres. A relatively healthy resale market is also allowing seniors to more from home ownership to renting.

In the PEI CMA, total housing starts climbed 93 per cent year-over-year. Singles increased by 17 per cent, while multi-unit starts climbed 133 per cent, which contributed directly to the significant monthly gain. This was due to new multi-unit apartment projects under development. From January to November 2018, total starts were trending 14 per cent higher, driven primarily by solid employment growth.

The standalone monthly SAAR of housing starts for all areas in Canada was 215,941 units in November, up from October’s 206,753 units. The SAAR of urban starts climbed five per cent in November to 202,054 units. Multiple urban starts increased by four per cent to 151,596 units in November, while single-detached urban starts rose eight per cent to 50,458 units. Meanwhile, rural starts were estimated at a SAAR of 13,887 units.

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