Is Canada building new housing too quickly?

The Canada Mortgage and Housing Corporation (CMHC) released its housing starts figures for September 2015, announcing a need for inventory management.

The trend measure in Canada was 202,506 units, compared to 195,804 in August 2015. The trend is a six month moving average of seasonally adjusted annual rates (SAAR).

“The trend in housing starts is at its highest point since January 2013, as a result of the launch of some major rental housing projects as well as continued strength in condominium construction,” says Bob Dugan, CMHC’s Chief Economist. “As a result, trend activity is now above the projected annual pace of around 190,000 new households. This underscores the continuing need for inventory management to minimize the number of completed but unsold units.”

The standalone SAAR was 230,701 units, compared to 214,255 in the previous month. The SAAR of urban starts jumped 7.7% to 216,194 units, with multi-unit urban starts increasing 10.5% to 157,919 and single-detached urban starts only going up 0.8% to 58,275.

All the areas of Canada experienced an increase in housing starts, except Ontario, but that’s not exactly surprising since Ontario was the only region to see an increase in August 2015. The estimated SAAR of rural starts was 14,507 units.

Housing starts in Toronto CMA were trending at 45,810 units, compared to 43,863 in August. The standalone SAAR was 58,113 units, a decrease from August’s 65,115. This decrease is due to fewer semis and apartment starts.

“Another month of significant apartment starts kept the trend number at its highest level since early 2013 while greater condominium apartment completions allowed developers to get started on new projects,” says Dana Senagama, CMHC Principal Market Analyst for the GTA. “Growth in full-time employment and a tight resale market continue to support strong home buying activity.”

The City of Toronto saw the greatest number of total starts - mostly apartment units - while Oakville came in second for starts, dominated by apartments, and Brampton had the most single-detached starts.

How will housing starts be affected by the winter weather? Time will tell!