Housing starts in Toronto are slowing down but remain stable
By Lucas on Oct 13, 2016
The Canada Mortgage and Housing Corporation (CMHC) released its housing starts figures for September 2016, announcing that every region of Canada experienced an upward trend except for Ontario.
The trend measure for last month’s national housing starts was 199,503 units, a slight increase compared to 196,465 in August. The trend is a six month moving average of seasonally adjusted annual rates (SAAR). British Columbia, the Prairies, Quebec, and Atlantic Canada all saw an increase in starts.
“Housing starts were on an upward trend in September, as residential construction increased across the country with the exception of Ontario, where the multiples segment softened to levels that are more consistent with household formation," says Bob Dugan, CMHC Chief Economist. “Quebec saw the largest gain in housing starts due to the development of new rental apartments intended for seniors. That said, Quebec’s growing apartment stock emphasizes the importance of inventory management.”
The standalone monthly SAAR was 220,617 units, a significant increase compared to the 184,201 in August. The SAAR of urban starts went up 19.7% to 201,848 units, with multiples going up 22.3% to 137,803 and single-detached starts increasing 14.5% to 64,045. Rural starts are estimated around 18,769 units.
Housing starts in Toronto CMA
With housing starts trending lower in Ontario, it’s not surprising that housing starts in Toronto Census Metropolitan Area (CMA) also went down. In September, starts trended at 37,947 units, compared to 42,125 the previous month.
“September saw fewer apartment starts in Toronto than earlier in the year, slowing the overall housing starts trend in the GTA,” says Dana Senagama, CMHC Principal Market Analyst for the GTA. “However, limited supply of resale low-rise homes is shifting demand to the pre-construction market, leading to stable starts for this type of dwelling.”
The standalone monthly SAAR was 30,232 units, down from 40,406 in August. The drop is due mostly to a decrease in apartment starts.
Though there was an overall decrease in apartment starts, the City of Toronto still had the most starts in the region and most of them were apartments. Brampton came in second with mostly single-detached starts. East Gwillimbury came in third with many new low-rise starts.
Senagama states that due to a limited supply of resale low-rise homes in the GTA, there will probably be more sales in the new low-rise market. But, the Building Industry and Land Development Association (BILD) recently announced that new low-rise inventory hit a record low of 1,379 units as of the end of August.
Is it possible that it’s working both ways? Perhaps there are people who want to buy new, but are turning to the resale market for more options.
