The trend measure of housing starts in Canada, a six-month moving average of the monthly seasonally adjusted annual rates (SAAR), was 199,920 units in October compared to 199,262 in September, according to Canada Mortgage and Housing Corporation (CMHC).
“In October, housing starts remained stable, as the trend remained essentially unchanged from September,” said Bob Dugan, CMHC chief economist. “While apartment starts are on a downward trend in British Columbia after reaching an all-time high at the beginning of the year, increased construction of single, semi-detached and row units in the rest of the country have helped offset the decline.”
CMHC uses the trend measure as a complement to the monthly SAAR of housing starts to obtain a more complete picture of Canada’s housing market, as SAAR data alone is largely driven by the multi-unit segment of the market which can vary significantly from one month to the next.
The standalone monthly SAAR for all areas in Canada was 192,928 units in October, down from 219,363 units in September. The SAAR of urban starts decreased by 12.1 per cent in October to 176,131 units. Multiple urban starts decreased by 15.3 per cent to 115,402 units in October and single-detached urban starts decreased by 5.4 per cent to 60,729 units. Rural starts were estimated at a seasonally adjusted annual rate of 16,797 units.
In October, the seasonally adjusted annual rate of urban starts decreased in British Columbia, Quebec, the Prairies, and in Atlantic Canada, but increased in Ontario.
Housing starts in the Toronto Census Metropolitan Area (CMA) trended higher at 39,664 units in October 2016 compared to 37,948 in September 2016 according to CMHC.
“Toronto’s housing starts trend rebounded in October after two months of decline,” said Dana Senagama, CMHC principal market analyst for the GTA. “Limited resale listings of single-detached homes continue to cause demand to spill over into the new home market, prompting a pick-up in home construction.”
The City of Toronto recorded the highest number of starts within the Toronto CMA primarily due to a large number of apartment starts. This was followed by the City of Brampton, which had higher single-detached starts. Next was the Town of East Gwillimbury that saw construction begin on a number of low-rise homes. The standalone monthly SAAR was 47,972 units in October, up from 30,228 units in September. The increase was mainly a result of more apartment starts.
Housing starts in the Vancouver CMA were trending at 26,074 units in October compared to 29,537 units in September.
“Total housing starts trended lower in October due to a decline in apartment starts,” said Robyn Adamache, CMHC principal market analyst for Vancouver. “Builders are concentrating on the many existing projects already underway in the CMA.”
Housing starts in the Abbotsford-Mission CMA were trending at 1,153 units in October, up from 939 units in September. The upward trend there is mainly due to an increase in apartment starts.
The standalone monthly SAAR was 12,023 units in October, down from 36,803 units in September. The decline in the SAAR for Vancouver was across all home types, but the largest drop was apartment starts. A record number of homes are already under construction, and builders are concentrating on those existing projects. When it comes to new developments, builders are waiting to see how the local resale market looks once effects of the Foreign Buyer Tax and the revised mortgage qualification rules take shape.
In the Montréal CMA, housing starts were trending at 20,604 units in October compared to 20,130 in September. The stand-alone monthly SAAR was 15,204 units in October, down from 35,423 in September. The significant variation in the annual rate was due to the multiple-unit housing segment, where notable fluctuations are often observed from one month to the next.
“As a result of the strong level of activity registered in September, the trend in housing starts in the Montréal CMA remained high in October, relative to recent months,” said Francis Cortellino, CMHC principal market analyst for the Montréal. “Still, in 2016, the year will end with fewer starts than in 2015, mainly on account of the slowdown in condominium construction.”
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