Home » Market News » Canadian housing starts trend upwards in April

Canadian housing starts trend upwards in April

New housing construction increased in Canada, with seasonally adjusted data exceeding 200,000 units for five months in a row. The increase in the trend was mainly due to apartment construction in British Columbia and Québec, which was partly offset by a decline in Ontario’s multiple starts.

Monthly highlights

  • Apartment construction continues to drive the residential market in Halifax. April saw over 400 additional multiple starts breaking ground, bringing year-to-date multiples starts growth to 169% compared to last year. Demand is being driven in part by the ageing population as downsizing baby boomers are increasingly selling their homes and moving into rental units.
  • Even though the rate of housing starts in the Province of Québec was down in April, the total for the first four months was up by about 30% in the province’s urban centres. This result was mainly due to the significant construction of apartments, especially rental units, in the Montréal and Québec areas. As well, single-detached home starts have been strong so far in 2017, thanks in part to tightening resale market conditions.
  • Despite the slight decline registered in April, residential construction in the Gatineau area showed positive results for the first four months of the year. The gains were particularly strong in the rental segment, with construction getting under way on many seniors’ housing units. Overall, starts were supported by an increase in housing demand and a decrease in the number of unsold units on the new and existing home markets.
  • The trend in housing starts in Toronto remained stable in April, as slight increases in low-rise homes were offset by some declines in apartment starts. Overall, new home construction this year has been building momentum as both new single-detached and townhome starts trended higher to reach a nine-year high in April. Tight conditions in the resale market continue to cause demand to spill over into the new home market.
  • In London, April 2017 single-detached starts were much higher than in April 2016 and the ten year average for April. The gap between house prices in Toronto and London has widened significantly, making new single-detached homes in London that much more appealing to retirees from Toronto who wish to sell their home but not downsize.
  • In Winnipeg, a decrease in inventories in the new home market and balanced resale market conditions are allowing builders to increase production. Actual housing starts in April increased year-over-year for the fourth consecutive month, boosting year-to-date starts to their highest levels since 1987.
  • The trend measure for housing starts in the Kelowna CMA surged upwards again in April, due to an increase in both single-detached and multi-unit construction. In particular, a number of large apartment rental projects are now underway as builders continue to respond to the low vacancies that have characterized Kelowna’s rental market for the past two years.
  • Housing starts in Metro Vancouver trended higher for the first time in four months, led by multiple-family residential construction. Builders are responding to demand in the market as eight in ten townhouses and all apartments were sold at completion during the last two months.

CMHC uses the trend measure as a complement to the monthly SAAR of housing starts to account for considerable swings in monthly estimates and obtain a more complete picture of Canada’s housing market. In some situations analyzing only SAAR data can be misleading, as they are largely driven by the multi-unit segment of the market which can vary significantly from one month to the next.

-CMHC

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