Housing starts in Canada exceeded expectations in June, according to statistics released by the Canadian Mortgage and Housing Corporation (CHMC).
CMHC research found that housing starts across the country reached a SAAR (Seasonally Adjusted Annual Rate) of 245,657 in June, 26% higher than May’s 196,809 units. Seasonally adjusted annual rates are figures that account for seasonal fluctuations in data and help get a better picture of the market.
Urban starts were up 26% in June to 234,238 units – multiple urban starts rose 31% to 185,804 and single-detached urban starts increased 8% to 48,434 units. The SAAR for rural starts was 11,419 units.
Bob Dugan, CMHC’s chief economist, stated:
“The national trend in housing starts increased in June, primarily due to higher trending row and apartment starts, in urban areas. The strong surge in the SAAR of apartment starts in April is also contributing to the high level of the trend measure of total housing starts in June”.
The rise in housing starts points to sustained growth in the real estate industry for the second quarter. Robert Kavcic, senior economist at BMO Capital Markets, told The Globe and Mail:
“Residential construction activity remains rock solid, as still-strong demographic flows are supporting unit demand.”
Breakdown by Region
Many markets across Canada have shown growth, particularly in multi-unit and rental starts. Some areas, such as Sherbrooke and Halifax, have even achieved record numbers. However, while most regions saw an increase in construction, Edmonton, Saskatoon, and Kingston experienced a decline.
In the Vancouver Metro area, there was an increase in multi-unit starts. Thanks to population growth and a thriving local economy, year-to-date housing starts in the city have increased by about 25% compared to the same period in 2018. The areas which stood out have been Vancouver and Richmond.
Edmonton saw a decline in single-detached housing starts but multi-units have doubled year-over-year. Moreover, many developers have been focusing on finishing up older projects rather than starting new ones.
Growth in the millennial population in Lethbridge has contributed to a surge in housing starts of all types here.
Saskatoon builders increased the number of multi-unit building projects. However, year-to-date housing starts in that city fell by 16% from last year. The CMHC cites rising construction prices and weak demand for new homes as some of the contributing factors.
In Winnipeg, there was a 15% increase in new construction over last year. A large portion of this was apartment starts as the organization reported a decline in single-detached, semi-detached and row units compared to 2018.
In the eastern part of Canada, a rise in semi-detached units in the Greater Sudbury area boosted the region’s overall housing starts statistics.
The number of year-to-date new developments was down in Kingston by 14% over 2018 for most housing types. However, apartment starts were about the same as last year, CMHC reported.
Toronto saw a month-over-month increase in the number of apartment and single-detached starts, while row and semi-detached construction decreased. As with Vancouver, multi-unit housing was predominant here as well. This is largely due to demand from homebuyers’ preference for more affordable condo units or row houses over single-detached homes.
Multi-units in the Kitchener-Cambridge-Waterloo region also saw an increase, while single-detached starts went down. Apartment construction also rose in the area.
Sherbrooke’s real estate market has had a robust year so far. There have been 984 housing units started since the beginning of 2019, the highest level in over 30 years. According to the CMHC, it is due to rental construction.
Housing starts in Quebec City have remained about the same as last year. There have been 2,600 unit starts since January 2019. A large number of these are represented by rentals, as the region’s population is aging and therefore focusing more on these kinds of real estate options.
Halifax has seen a 45% year-over-year increase in housing starts. Multi-units went up 62% over last year and apartment construction has been at the highest level since 2015.