Canadian housing starts sharply pointed upward last month

Canadian housing starts sharply pointed upward last month

Canadian housing starts sharply pointed upward last month

After around a year of mostly weaker activity, housing starts accelerated in August, according to Canada Mortgage and Housing Corporation.

The trend measure stood at 218,998 units last month, markedly larger than the 208,931 units in July 2019.

“Higher trending single-detached starts in urban centres in July and August following roughly a year of declines combined with higher-trending multi-family units in August to push the total starts trend to its highest level since June 2018,” CMHC chief economist Bob Dugan said.

The standalone monthly seasonally adjusted annual rate (SAAR) of housing starts for all areas in Canada was 226,639 units in August, increasing by 1.9% from the July level.

Toronto was among the standout markets in terms of performance, with total housing starts trending higher across all asset classes except semi-detached housing.

“Multi-unit home starts are being led by condominium apartments breaking ground because of strong pre-construction sales over the past two-years,” CMHC stated. “Despite single-detached homes trending higher in August, demand for this housing type continues to wane due to rising home ownership costs.”

Meanwhile, Vancouver’s housing starts trend moved lower.

“Compared to the same month last year, both multi-unit and single-detached home starts declined by over 17% in the CMA. However, the year-to-date starts in the CMA remained fairly stable due to a decline in singles starts which was offset by an increase in the multi-units segment.”

Calgary also exhibited similar figures to that of Vancouver, as “an increase in multi-family construction was offset by a decline in single-detached units.”

“Construction activity continues to slow, as year-to-date housing starts remain lower than last year's levels in both the single-detached and multi-family segments of the market. The relatively slow pace of economic recovery and elevated inventories have caused builders to slow down production.”