Coming off a record-breaking year for new home construction in 2021, new home starts came in below expectations in January, according to the monthly report from Canada Mortgage and Housing Corporation (CMHC)..Starts decreased 3% from December to an annualized trend of 230,754 starts, missing market expectations of 245,000 units..The trend is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts..“On a trend and monthly SAAR basis, the level of housing starts activity in Canada remains historically high; however, the six-month trend in housing starts was lower from December to January,” said Bob Dugan, CMHC’s chief economist. .For SAAR housing starts in Canada’s urban areas, single-family home starts were higher, while multi-family starts declined in January. .“The SAAR of total urban starts decreased by 5% to 204,428 units in January,” said Duggan..“Multi-family urban starts decreased by 9% to 144,332 units, while single-family urban starts increased by 7% to 60,096 units. Rural starts were estimated at a seasonally adjusted annual rate of 26,326 units..“Of Montreal, Toronto and Vancouver, Montreal was the only market to post growth in total SAAR starts in January, due to higher single-family and multi-family starts.”.In a report for TD Economics, Rishi Sondhi, said the January numbers were still considered healthy, with the six-month moving average of 254,100 starts exceptionally strong..Sondhi said urban starts were lower in seven of 10 Provinces: .In Ontario, starts fell 7,500 to 59,100 units — the lowest level since May 2020. Starts fell by 6,600 in the Prairies, to 33,000 units. Alberta and Saskatchewan were the drags.In the Atlantic Region, starts plunged by 4,300 to 9,800 units, weighed down primarily by Nova Scotia and New Brunswick.In B.C., starts decreased by 16,300 to 35,400 units. In contrast they increased by 24,600 to 67,100 units in Quebec..“Starts continued to move lower in January, falling to their lowest level in urban markets since September 2020,” said Sondhi..“That said, they remain healthy on a trend basis, underpinned by elevated demand and prices as well as relatively low inventory levels. In addition, January’s (number) comes on the heels of a very strong year for starts in 2021, which should bring some relief on the supply front, with a lag, when these units are completed. Building permits point to starts activity remaining firm over the next few months. Beyond that, we expect starts to move lower, trending towards demographic fundamentals. .“Higher interest rates are likely to take some steam from demand, thus moderating the pace of homebuilding, albeit with a lag. This should counter the positive impacts stemming from improved population growth.”.At the end of 2021, there were 28,503 homes under construction in the country, comprised of 8,640 single-family, 1,816 semi-detached, 3,099 town and 14,948 apartment homes..CMHC has yet to release the number of homes under construction as of the end of January..Myke Thomas is a Western Standard contributor..mykethomas@live.com
Coming off a record-breaking year for new home construction in 2021, new home starts came in below expectations in January, according to the monthly report from Canada Mortgage and Housing Corporation (CMHC)..Starts decreased 3% from December to an annualized trend of 230,754 starts, missing market expectations of 245,000 units..The trend is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts..“On a trend and monthly SAAR basis, the level of housing starts activity in Canada remains historically high; however, the six-month trend in housing starts was lower from December to January,” said Bob Dugan, CMHC’s chief economist. .For SAAR housing starts in Canada’s urban areas, single-family home starts were higher, while multi-family starts declined in January. .“The SAAR of total urban starts decreased by 5% to 204,428 units in January,” said Duggan..“Multi-family urban starts decreased by 9% to 144,332 units, while single-family urban starts increased by 7% to 60,096 units. Rural starts were estimated at a seasonally adjusted annual rate of 26,326 units..“Of Montreal, Toronto and Vancouver, Montreal was the only market to post growth in total SAAR starts in January, due to higher single-family and multi-family starts.”.In a report for TD Economics, Rishi Sondhi, said the January numbers were still considered healthy, with the six-month moving average of 254,100 starts exceptionally strong..Sondhi said urban starts were lower in seven of 10 Provinces: .In Ontario, starts fell 7,500 to 59,100 units — the lowest level since May 2020. Starts fell by 6,600 in the Prairies, to 33,000 units. Alberta and Saskatchewan were the drags.In the Atlantic Region, starts plunged by 4,300 to 9,800 units, weighed down primarily by Nova Scotia and New Brunswick.In B.C., starts decreased by 16,300 to 35,400 units. In contrast they increased by 24,600 to 67,100 units in Quebec..“Starts continued to move lower in January, falling to their lowest level in urban markets since September 2020,” said Sondhi..“That said, they remain healthy on a trend basis, underpinned by elevated demand and prices as well as relatively low inventory levels. In addition, January’s (number) comes on the heels of a very strong year for starts in 2021, which should bring some relief on the supply front, with a lag, when these units are completed. Building permits point to starts activity remaining firm over the next few months. Beyond that, we expect starts to move lower, trending towards demographic fundamentals. .“Higher interest rates are likely to take some steam from demand, thus moderating the pace of homebuilding, albeit with a lag. This should counter the positive impacts stemming from improved population growth.”.At the end of 2021, there were 28,503 homes under construction in the country, comprised of 8,640 single-family, 1,816 semi-detached, 3,099 town and 14,948 apartment homes..CMHC has yet to release the number of homes under construction as of the end of January..Myke Thomas is a Western Standard contributor..mykethomas@live.com
