Housing Starts in Toronto Decrease for the First Time in Five Months
By Lucas on Aug 11, 2015
The Canada Mortgage and Housing Corporation (CMHC) released its national housing starts data for July 2015, announcing that multiple urban starts are making up for the decline in single-detached starts across the country.
The trend measure for July was 185,586 units, which is down from 184,035 units in June. The trending figure is a six-month moving average of monthly seasonally adjusted annual rates (SAAR). The figures are based on numbers that have been modified to remove seasonal variation. The figures are then multiplied by 12 to represent an annual average.
“Housing starts in Canada have been trending higher over the past three months, with gains in multiple starts offsetting declines in single starts,” says Bob Dugan, CMHC’s Chief Economist. “The decline in single starts is in line with CMHC’s expectations of buyers shifting demand away from higher priced new single-detached homes towards lower-priced alternatives. Gains in multiple starts are largely due to higher rental apartment starts, a substantial portion of which are seniors’ residences.”
The standalone monthly SAAR was 193,032 units, which is down from June’s 202,338. The SAAR of urban starts was down 5.9% to 176,998, with multiple starts down 8.2% to 119,478 units and single-detached starts relatively the same, dropping just 0.8% to 57,520.
Housing starts were down in Ontario, the Prairies, Atlantic Canada, and Quebec, leaving British Columbia as the only area to experience an increase. Rural starts are estimated to be around 16,034 units.
Phase 1 of Friday Harbour by Geranium Homes and Pemberton Group is under construction in Innisfil
For the Toronto Census Metropolitan Area (CMA), housing starts were trending at 36,810 units, down from 39,108 in June. “Toronto housing starts decreased for the first time in five months, due to contracting apartment starts,” says Dana Senagama, CMHC Principal Market Analyst for the GTA. “However, strong sales of pre-construction condominium apartments over the past two years will convert to more starts as the year progresses. Low-rise starts remained robust. A tighter resale market also resulted in demand spilling over into the new home market.”
The standalone SAAR for Toronto CMA was 23,657 units, down from 30,623 in June. The City of Toronto had the most starts, most of which were multiples, while Vaughan and Brampton had the second most starts, most of which were single-detached.
Will a tighter resale market continue to push homebuyers into the new home market? Will condo sales continue to spur multiple starts? Stay tuned!
