CMHC: Weaker housing starts placing supply at risk

Declines in BC and the Prairies are especially concerning

CMHC: Weaker housing starts placing supply at risk

As indicated by the Canada Mortgage and Housing Corporation’s monthly starts survey, the rate of new supply nationwide is on a sustained decline, with British Columbia and the Prairies being particular trouble spots.

Excluding Quebec – as construction resumed only on April 20 – the national housing starts trend was 151,072 units in May, down from 155,600 units in April 2020.

“Higher multi-family starts in Ontario and the Atlantic provinces were offset by declines in British Columbia and the Prairies. We expect national starts to continue to register declines in the near term, reflecting the impact of COVID-19 measures,” said Bob Dugan, chief economist at CMHC.

Last month, BC posted a 33% year-over-year shrinkage in housing starts, while the Prairies saw a similarly concerning 23% drop.

These trends followed a month of significant decreases in the value of building permits issued by Canadian municipalities. The value dropped by 17.1% on a month-over-month basis to end up at $6 billion in April.

Statistics Canada reported that the total value of residential permits fell in nine provinces in April, declining by 14.2% to $3.9 billion. Single-family dwellings, in particular, saw much lowered value (down 35.9% to $1.4 billion).