Housing starts take a downward turn in Toronto
By Lucas on Jun 08, 2016
The Canada Mortgage and Housing Corporation (CMHC) released its May 2016 housing starts figures, announcing that the national trend declined last month.
In May, Canadian housing starts trended at 191,000 units, down from 194,950 in April. The trend is a six month moving average of seasonally adjusted annual rates (SAAR).
The standalone monthly SAAR was 188,570 units, down from 191,388 in April. The SAAR of urban starts dropped 2.5% to 170,432 units, with multiple-urban starts declining 5.7% to 110,834 and single-detached urban starts up 4.2%, reaching 59,598 units.
British Columbia and the Prairies were the only regions to experience declines in the annual rate of urban starts; Ontario, Atlantic Canada, and Quebec saw increases. The estimated rural starts was 18,138 units.
“Housing starts slowed in May, and are now on pace to reach 191,000 units in Canada — falling within the upper range of our housing market outlook forecast for the year,” says Bob Dugan, CMHC Chief Economist. “The decline we see in the trend is led by fewer multiple starts in urban areas, particularly in larger centres like Toronto.”
Housing starts in Toronto CMA
In the Toronto Census Metropolitan Area (CMA), housing starts trended at 37,324 units, a slight drop compared to April’s trend of 41,634. The standalone SAAR was 33,103 units, down from 37,359. As mentioned above, CMHC attributes this to fewer apartment starts in the City of Toronto.
“Led by slowed construction of new apartments, Toronto housing starts edged down overall in May,” says Dana Senagama, CMHC Principal Market Analyst for the GTA. “Single-detached home starts remain steady, however, as limited resale listings continue to drive buyers to the new home market.”
Though CMHC reported fewer apartment starts in Toronto, it still had the most starts out of any region in the Toronto CMA. Brampton and Newmarket followed, with a high number of single-detached starts.
It’s interesting that CMHC reports that buyers are turning to the new home market due to short supply in the resale market when the new low-rise market is also experiencing record lows in inventory. When will this housing shortage be corrected?
