CMHC Housing Starts for November 2013

The Canada Mortgage and Housing Corporation (CMHC) recently released its report on November 2013’s housing starts statistics.

According to CMHC, housing starts in Canada were trending at 194,014 units in November. This is a six-month moving average of monthly seasonally adjusted annual rates (SAAR), meaning that the trend is based on “monthly figures adjusted to remove normal seasonal variation and multiplied by 12 to reflect annual levels.” The standalone SAAR for November was 192,235, a drop from October’s 198,161 housing starts.

“The trend in housing starts has increased slightly since July, before stabilizing in November. Overall, housing starts have been following a trend similar to sales on the existing home market. As sales rise relative to listings of existing homes, buyers are increasingly meeting their needs in the new home market,” said Mathieu Laberge, Deputy Chief Economist at CMHC.

Urban starts (housing starts in towns or cities with a population over 10,000) saw a decrease of 3.4%, down to 171,347 units. British Columbia and the Prairies experienced minor increases in urban starts, while Atlantic Canada and Ontario saw dramatic decreases. Quebec remained practically unchanged.

Rural starts (housing starts in towns or cities with a population less than 10,000) had an SAAR of 20,888 units in November.

So, what does all this mean? Laberge put it best; Canada’s housing market is stabilizing. Sales rise with the quantity of available homes. As the market is cooling off from a few hot years, demand is being met and builders and developers are recognizing that there isn’t a need to slam the market with a bunch of new inventory. Some media outlets are still foretelling disaster for Canada’s housing market...just know that stabilization is a good thing, in fact, the number of housing starts should probably be even lower. What goes up, must come down (and then eventually back up again!).