The Calgary region saw housing starts for single-detached homes increase in May compared with a year ago while multi-family projects dropped.
Canada Mortgage and Housing Corp. data released Monday revealed there were 606 single-detached starts in the month for the Calgary census metropolitan area, which was up 8.4 per cent. However, the multi-family sector experienced a decline of 18.3 per cent to 424 units.
“It isn’t uncommon to see pronounced changes in multi-family starts from month to month. This is mainly due to the apartment segment. Once the foundation is poured for an apartment building, all the residential units in that building are immediately recorded as a start,” said Richard Cho, senior market analyst in Calgary for the CMHC.
“Single-detached construction has increased this year. The economy in Calgary continues to support housing demand with impressive gains in employment and strong migration. Rising incomes and relatively-low mortgage rates have also provided buyers an opportunity to purchase a home. Declines in single-detached inventories along with active listings has prompted more new construction as well.”
Total starts in the region were down 4.5 per cent from a year ago to 1,030 units.
On a year-to-date basis, single-detached starts are up by 6.5 per cent to 2,696 while multi-family starts have increased by 97.8 per cent to 4,191 compared with the same period a year ago. Total starts year-to-date have risen by 48.1 per cent to 6,887 units.
CMHC said housing starts in the Calgary CMA were trending at 15,776 units in May compared with 17,239 in April. The trend is a six-month moving average of the monthly seasonally-adjusted annual rates of total housing starts.
Nationally, Canadian homebuilding activity has firmed up after a volatile winter, said Robert Kavcic, senior economist with BMO Capital Markets.
Canadian housing starts in May rose to a stronger-than-expected 198,300 annualized units, from 196,700 in April.
“There are still many signs that the Canadian housing market may be moderately overbuilt,” said Diana Petramala, economist with TD Economics. “The number of condos for sale in the existing home market has increased considerably faster than demand in Ottawa, Montreal, Quebec City, Toronto, Edmonton, Regina and Saskatoon. The number of newly built and unabsorbed units is starting to stabilize, but at historically high levels. Meanwhile, the number of new homes under construction is at an all-time high.
“Looking past this near-term volatility, housing starts are expected to continue to trend down to 170,000 to 175,000 units, a pace that is more in line with household formation, as the housing market works through the elevated number of condos for sale.”