Strong housing pace stumbled in August
September 21, 2018
Canada’s housing construction continued a strong pace in August, keeping the seasonally adjusted level at 219,526 starts, but slowing a bit from the action earlier this year, according to Canada Mortgage and Housing Corp. (CMHC).
"The national trend in housing starts continued to decline in August from the historical peak that was recorded in March 2018," said Bob Dugan, CMHC's chief economist. "This moderation brings total starts closer to historical averages, largely reflecting recent declines in the trend of multi-unit starts from historically elevated levels earlier in the year."
Total housing starts in Toronto trended lower mainly due to fewer condominium apartments and single-detached home starts. Rising prices and land constraints have pulled back sales of pre-construction single-detached units, resulting in fewer single-detached starts so far in 2018 when compared to the same period in 2017. However, strong pre-sales of condominium apartments have led to a higher level of condominium starts on a year-to-date basis, despite the pullback in August.
Starts are trending down in most centres of the southern Ontario, CMHC reports, from their high levels a year earlier. Windsor, for example, is running 27 per cent below last year.
Montreal, after a robust 2017, saw seasonally adjusted starts fall 35 per cent as of August, compared to a year earlier, to 11,734 units, with the decline in both detached and multi-family construction.
Housing starts in Metro Vancouver trended higher in August 2018 as more multi-family projects got underway across the region. The cities of Vancouver and Burnaby accounted for over half of starts during the month due to a number of new condominium apartment projects. Regionally, home construction so far in 2018 moved ahead of the level recorded during the first eight months of 2017.
In Kelowna, where a provincial speculation tax on secondary homes is blamed for a recent slowdown, starts of both detached house and multi-family units were down nearly 30 per cent in the first eight months of this year compared with the same period in 2017.
CMHC reports the standalone monthly seasonally adjusted annual rate (SAAR) of housing starts across Canada was 200,986 units in August, down from 205,751 units in July. The SAAR of urban starts decreased by 2.5 per cent in August to 184,925 units. Multiple urban starts decreased by 2.4 per cent to 132,700 units, while single-detached urban starts decreased by 2.6 per cent to 52,225 units.