CMHC: Canadian housing starts trend up in May 2017

Crucial factor is higher construction activity in urban markets

CMHC: Canadian housing starts trend up in May 2017
The six-month moving average rate of construction of new homes in Canada went up to 214,621 units in May 2017 (compared to 213,435 units the month prior), according to the latest data from the Canada Mortgage and Housing Corporation.

A major contributor to this development is the higher pace of starts in the country’s urban markets, according to CMHC chief economist Bob Dugan.

“Row and apartment units led the upward move, while construction has slowed for pricier single- and semi-detached houses,” Dugan said.

Most urban centres in Alberta and Saskatchewan saw increases in housing starts, reflective of the recent gradual recovery in the petro-provinces.

“Strengthening labour market conditions in Calgary, Edmonton and Regina have generated more optimism among local homebuilders,” CMHC said, but added that “in Saskatoon, year-to-date starts declined 25% as builders there remain cautious due to elevated multi-unit inventory.”

British Columbia similarly saw a higher starts trend last month as increased activity in Kelowna, Abbotsford-Mission, and other urban areas made up for the slower pace in Vancouver and Victoria.

“Low inventory in both the resale and new home market is fueling new construction with single-detached and multi-family starts leading the way.”

However, Toronto starts fell “largely as a result of a decrease in single-detached and row units. May marks the first month that single-detached starts have bucked their upward trend since September 2016.”

“This coincides with a noticeable increase in new home listings in the resale market, providing added choice to homebuyers, causing less demand to spill over into the new home market,” CMHC stated.

Interested parties can view the CMHC’s Preliminary Housing Starts data here.

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