Canadian housing starts trend upwards as Toronto construction takes a breather
By Newinhomes on May 09, 2019
The Canada Mortgage and Housing Corporation released its monthly housing starts figures for April 2019, reporting an upwards trend due to strong multi-unit starts.
Canadian housing starts trended at 206,103 units in April, up slightly from the 202,420 recorded in March 2019. The trend is a six month moving average of seasonally adjusted annual rates (SAAR).
"The national trend in housing starts increased in April, as higher-trending multi-unit starts offset a continued decline in the trend for single starts, in urban areas," says Bob Dugan, CMHC's chief economist. "The increase in the trend of multi-unit starts reflects a strong recovery in multi-unit SAAR activity in March and April from consecutive declines at the end of 2018 and the first months of 2019."
The standalone monthly SAAR of housing starts was 235,460 units in April 2019, up 22.6% from the previous month. The SAAR of urban starts increased 24% to 220,387 units, with multiple starts up nearly 30% with 175,732 units and detached starts up 6% with 44,655. Rural starts are estimated at 15,073 units.
In Toronto, housing starts trended lower, but CMHC points out that the strong condo sales over the last two years will soon lead to many new multi-unit starts in the coming months. The continued decline in new detached home sales will lead to fewer starts in the near future.
Oshawa also saw its housing starts trend drop, recording the slowest April in the last 40 years. A few years ago, the high demand for affordable apartments led to a record high number of housing starts in 2018. Now, builders are busy building these homes, so starts have really slowed down.
Unlike Toronto and Oshawa, housing starts in Hamilton trended up, mostly due to many townhome starts, the highest level since May 2014. The high competition in the resale market and the good price point for townhomes attracted many buyers to the preconstruction market.
In general, new home sales across the Greater Toronto and Hamilton Area were slow in 2018, so this year will likely be slow for housing starts.
