According to a report from Canada Mortgage and Housing Corp. (CMHC), the annual rate of housing starts in Canada has decreased by 10% in January compared to December. This reduction in the annual pace of housing is due to fewer new multi-unit projects like apartments, townhouses, and condos.
What the CMHC Report Suggests
On Thursday, Canada Mortgage and Housing Corporation released the seasonally adjusted data for the annual rate of housing. According to the report, the annual rate of housing has been reported at 223589 units for January, a decrease compared to 248968 units in December.
Marc Ercolao, an economist at TD Bank, said that the current homebuilding rate is high compared to old times. He added that Canada should push more projects involving the construction of new homes to prevent a further decrease in the house affordability rate. Looking forward, he believes that any possible rate cuts happening in the future might drive up the building of new homes.
The decrease in the annual pace of housing has resulted from a reduction in the annual pace of urban housing starts, which has gone down by 11% to 208119 units. Also, the rate for multi-unit urban has decreased by 14% to 164789 units. The single-attached urban has gone up by 0.08% at 43330 units.
Region-Wise Changes in the Rate of Housing Starts
In Toronto, the annual rate of housing starts has gone up by 179%, which was mainly due to a rise in multi-unit starts. However, Montreal and Van Couver have decreased by 28% and 55%, respectively, due to a decrease in multi-unit starts.
There was also an 88% drop in the Kitchener-Canbridge-Waterloo region of Ontario, along with a 64% decline in Ottawa. The Edmonton saw a decrease of 53% in housing starts. However, there was a rise of 39% in the annual rate in Calgary when seen against December.
It was reported that the rate of rural starts was calculated at 15470. According to CMHC, the actual number of housing starts in Canada for urban centers has increased by 13%, to 14878 units in January compared to 13220 units reported in January 2023.
In Toronto, the actual housing starts have increased by 49% year-over-year, but the data has been reported down for Vancouver and Montreal by 44% and 6%, respectively.
The 6-month moving average of the monthly seasonally adjusted annual rates for housing has been reported at 244827, a 2% decline compared to the 249757 units calculated in December 2023.
Bob Dugan, a chief economist at CMHC, said that January 2024 had seen the second-highest number of new construction projects. He added that although there was less housing construction in January 2024 compared to December 2023, there has still been an overall increase in construction activity since they started keeping records in 1990.
On 15th February 2024, the CMHC released the housing starts, which acts as a number that shows the number of residential housing projects that have been started and is majorly divided into 3 categories: single-family houses, small condos or townhouses, and five or more units of apartment buildings.