Canadian Housing Starts Trend Decreases in August

Bob Dugan, Chief Economist, CMHC (CNW Group/Canada Mortgage and Housing Corporation)

Housing Starts in Canada - All areas (CNW Group/Canada Mortgage and Housing Corporation)

OTTAWA, Sept. 11, 2018 /CNW/ - The trend in housing starts was 214,598 units in August 2018, compared to 219,656 units in July 2018, according to Canada Mortgage and Housing Corporation (CMHC). This trend measure is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts.

"The national trend in housing starts continued to decline in August from the historical peak that was recorded in March 2018," said Bob Dugan, CMHC's chief economist. "This moderation brings total starts closer to historical averages, largely reflecting recent declines in the trend of multi-unit starts from historically elevated levels earlier in the year."

Monthly Highlights

Vancouver
Housing starts in the Vancouver Census Metropolitan Area (CMA) trended higher in August 2018 as more multi-family projects got underway across the region. The cities of Vancouver and Burnaby led the way and accounted for over half of starts during the month due to a number of new condominium apartment projects. Demand for housing from residents remains strong and has resulted in the pace of new home construction so far in 2018 moving ahead of the level recorded during the first eight months of 2017.

Kelowna
Despite a very strong August for housing starts in the Kelowna CMA, the first 8 months of 2018 have seen a decrease of 29% in the single-detached segment and 28% in the multi-unit segment, relative to the record year of housing construction seen in 2017. Despite this decrease in construction activity, the pace of housing starts in 2018 remains well above the 10-year average.

Edmonton
The trend measure for housing activity in the Edmonton CMA moved upward significantly in August, driven by an increase in new construction of multi-unit dwellings. Despite the rebound in construction activity in August, housing starts in the first 8 months of the year remain approximately 7% below the pace of activity of the same period in 2017, as builders deal with elevated inventories of completed and unsold units.

Winnipeg
Total housing starts trended higher for the second consecutive month. Total housing starts increased by almost a third in August 2018 compared to a year earlier as condominium and rental apartment construction both increased.  Declining inventories have supported new construction.

Toronto
Total housing starts trended lower mainly due to fewer condominium apartment and single-detached home starts. Rising prices and land constraints have pulled back sales of pre-construction single-detached units over the past several years resulting in fewer single-detached starts so far in 2018 when compared to the same period in 2017. However, strong pre-construction sales of condominium apartments over the past couple of years have led to a higher level of condominium starts on a year-to-date basis, despite the pull-back in August.

Oshawa
Total housing starts trended higher in the Oshawa CMA, due to higher trending multi-family dwelling starts, particularly row units. August recorded the most actual row unit starts for the month in almost three decades. While demographic and economic conditions remain favourable, higher house prices in Toronto and surrounding areas continue to increase the popularity of relatively more affordable higher density housing in Oshawa.

Windsor
Housing construction in Windsor continues to rebound from a slow first half in 2018. The trend in new housing construction grew for the third month in a row, with greater multi-unit construction driving the increase. Year-to-date housing starts were down by 27% compared to the same period last year, as the extraordinary levels of activity seen in 2017 eased and moved closer to levels consistent with economic fundamentals.

Kingston
The August trend in Kingston CMA total housing starts declined slightly for the first time in the past five months. Yet, it remained close to the high level seen during the last year. This strength comes off the heels of a strong year for housing starts in 2017 and thus far robust starts in 2018. Demand likely has been supported by the relative affordability of all dwelling types compared to other Ontario CMAs.

Saguenay
In August 2018, year-to-date housing starts in the Saguenay CMA were up over the same period last year. However, the trends differed depending on the intended markets. In fact, in the freehold (single- and semi-detached) home segment, an increase in starts was recorded, likely supported by renewed growth in full-time employment. Conventional rental housing construction was down, particularly because of a relatively high vacancy rate and a net migration deficit.

Halifax
While construction activity on the single-detached market remained stable year-over-year, multiples starts this month have more than doubled the levels recorded last August. Year-to-date, multiples construction has outpaced the same period in 2017 by 7%, with rental market demand continuing to be impacted by growth in international and interprovincial migration into the Halifax CMA.

New Brunswick
The trend in total housing starts in New Brunswick was up in August. Construction of multi-unit buildings has led the way so far in 2018 increasing by 13% year-to-date. Single housing starts were the highest for the month of August since 2015 and have increased 9% year-to-date.

CMHC uses the trend measure as a complement to the monthly SAAR of housing starts to account for considerable swings in monthly estimates and obtain a more complete picture of Canada's housing market. In some situations analyzing only SAAR data can be misleading, as they are largely driven by the multi-unit segment of the market which can vary significantly from one month to the next.

The standalone monthly SAAR of housing starts for all areas in Canada was 200,986 units in August, down from 205,751 units in July. The SAAR of urban starts decreased by 2.5% in August to 184,925 units. Multiple urban starts decreased by 2.4% to 132,700 units in August while single-detached urban starts decreased by 2.6% to 52,225 units.

Rural starts were estimated at a seasonally adjusted annual rate of 16,061 units.

Preliminary Housing Starts data are also available in English and French through our website and through CMHC's Housing Market Information Portal. Our analysts are also available to provide further insight into their respective markets.

As Canada's authority on housing, CMHC contributes to the stability of the housing market and financial system, provides support for Canadians in housing need, and offers objective housing research and information to Canadian governments, consumers and the housing industry.

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Preliminary Housing Start Data in Centres 10,000 Population and Over
			Single-Detached			All Others				Total
			August 2017	August 2018	%	August 2017	August 2018	%	August 2017		August 2018	%
Provinces (10,000+)
N.-L.			65	61	-6	47	13	-72	112		74	-34
P.E.I.			29	33	14	17	23	35	46		56	22
N.S.			113	110	-3	152	283	86	265		393	48
N.B.			81	92	14	30	32	7	111		124	12
Atlantic			288	296	3	246	351	43	534		647	21
Qc			504	409	-19	2,114	1,410	-33	2,618		1,819	-31
Ont.			2,444	1,883	-23	5,886	3,570	-39	8,330		5,453	-35
Man.			209	242	16	369	490	33	578		732	27
Sask.			203	101	-50	352	153	-57	555		254	-54
Alta.			1,234	1,014	-18	954	1,772	86	2,188		2,786	27
Prairies			1,646	1,357	-18	1,675	2,415	44	3,321		3,772	14
B.C.			900	803	-11	2,118	3,077	45	3,018		3,880	29
Canada (10,000+)			5,782	4,748	-18	12,039	10,823	-10	17,821		15,571	-13
Metropolitan Areas
Abbotsford-Mission			50	23	-54	60	9	-85	110		32	-71
Barrie			34	103	203	0	11	##	34		114	235
Belleville			59	39	-34	10	29	190	69		68	-1
Brantford			15	70	367	29	16	-45	44		86	95
Calgary			388	403	4	421	693	65	809		1,096	35
Edmonton			566	415	-27	389	971	150	955		1,386	45
Greater Sudbury			13	17	31	19	4	-79	32		21	-34
Guelph			16	12	-25	10	116	##	26		128	392
Halifax			74	75	1	132	267	102	206		342	66
Hamilton			99	53	-46	292	158	-46	391		211	-46
Kelowna			56	31	-45	444	295	-34	500		326	-35
Kingston			41	18	-56	19	12	-37	60		30	-50
Kitchener-Cambridge-Waterloo			73	46	-37	543	109	-80	616		155	-75
Lethbridge			44	23	-48	66	34	-48	110		57	-48
London			211	55	-74	187	39	-79	398		94	-76
Moncton			25	27	8	12	22	83	37		49	32
Montréal			189	127	-33	941	798	-15	1,130		925	-18
Oshawa			86	79	-8	176	176	-	262		255	-3
Ottawa-Gatineau			219	376	72	621	765	23	840		1,141	36
	Gatineau		42	59	40	180	141	-22	222		200	-10
	Ottawa		177	317	79	441	624	41	618		941	52
Peterborough			27	28	4	27	15	-44	54		43	-20
Québec			66	52	-21	579	165	-72	645		217	-66
Regina			61	33	-46	198	29	-85	259		62	-76
Saguenay			33	15	-55	12	23	92	45		38	-16
St. Catharines-Niagara			99	58	-41	59	37	-37	158		95	-40
Saint John			20	22	10	0	0	-	20		22	10
St. John's			48	43	-10	28	8	-71	76		51	-33
Saskatoon			118	53	-55	143	114	-20	261		167	-36
Sherbrooke			9	6	-33	12	30	150	21		36	71
Thunder Bay			20	23	15	24	12	-50	44		35	-20
Toronto			887	523	-41	3,725	1,971	-47	4,612		2,494	-46
Trois-Rivières			11	7	-36	179	2	-99	190		9	-95
Vancouver			430	431	0	1,351	1,663	23	1,781		2,094	18
Victoria			63	66	5	120	514	328	183		580	217
Windsor			82	58	-29	51	65	27	133		123	-8
Winnipeg			158	203	28	358	480	34	516		683	32
Total			4,390	3,613	-18	11,237	9,652	-14	15,627		13,265	-15

Data for 2017 based on 2016 Census Definitions.

Data for 2018 based on 2016 Census Definitions.

Source: Market Analysis Centre, CMHC

## not calculable / extreme value

Preliminary Housing Start Data - Seasonally Adjusted at Annual Rates (SAAR)
			Single-Detached			All Others			Total
			July 2018	August 2018	%	July 2018	August 2018	%	July 2018	August 2018	%
Provinces (10,000+)
N.L.			592	558	-6	281	147	-48	873	705	-19
P.E.I.			246	325	32	60	276	360	306	601	96
N.S.			1,134	1,266	12	4,236	3,390	-20	5,370	4,656	-13
N.B.			770	703	-9	1,226	361	-71	1,996	1,064	-47
Qc			5,917	5,516	-7	27,474	22,296	-19	33,391	27,812	-17
Ont.			20,583	20,140	-2	45,279	40,495	-11	65,862	60,635	-8
Man.			2,251	2,557	14	6,000	5,880	-2	8,251	8,437	2
Sask.			1,443	1,116	-23	900	1,836	104	2,343	2,952	26
Alta.			11,333	10,966	-3	17,348	21,056	21	28,681	32,022	12
B.C.			9,337	9,078	-3	33,180	36,963	11	42,517	46,041	8
Canada (10,000+)			53,606	52,225	-3	135,984	132,700	-2	189,590	184,925	-2
Canada (All Areas)			66,116	64,429	-3	139,637	136,558	-2	205,751	200,986	-2
Metropolitan Areas
Abbotsford-Mission			399	242	-39	1,332	108	-92	1,731	350	-80
Barrie			1,082	1,240	15	0	132	##	1,082	1,372	27
Belleville			404	370	-8	108	348	222	512	718	40
Brantford			536	658	23	252	192	-24	788	850	8
Calgary			3,283	4,395	34	8,508	8,316	-2	11,791	12,711	8
Edmonton			5,808	4,701	-19	6,216	11,652	87	12,024	16,353	36
Greater Sudbury			121	140	16	96	48	-50	217	188	-13
Guelph			90	143	59	972	1,392	43	1,062	1,535	45
Halifax			683	814	19	3,960	3,204	-19	4,643	4,018	-13
Hamilton			677	595	-12	2,712	1,896	-30	3,389	2,491	-26
Kelowna			585	398	-32	1,344	3,540	163	1,929	3,938	104
Kingston			308	167	-46	312	144	-54	620	311	-50
Kitchener-Cambridge-Waterloo			604	621	3	744	1,308	76	1,348	1,929	43
Lethbridge			439	297	-32	96	408	325	535	705	32
London			1,578	516	-67	1,104	468	-58	2,682	984	-63
Moncton			277	245	-12	240	264	10	517	509	-2
Montréal			2,559	1,765	-31	15,450	9,969	-35	18,009	11,734	-35
Oshawa			470	1,145	144	816	2,112	159	1,286	3,257	153
Ottawa-Gatineau			3,414	3,873	13	6,168	9,180	49	9,582	13,053	36
	Gatineau		359	522	45	2,964	1,692	-43	3,323	2,214	-33
	Ottawa		3,055	3,351	10	3,204	7,488	134	6,259	10,839	73
Peterborough			466	274	-41	0	180	##	466	454	-3
Québec			788	617	-22	3,192	1,980	-38	3,980	2,597	-35
Regina			310	354	14	456	348	-24	766	702	-8
Saguenay			251	127	-49	192	276	44	443	403	-9
St. Catharines-Niagara			442	615	39	144	444	208	586	1,059	81
Saint John			151	188	25	624	0	-100	775	188	-76
St. John's			432	412	-5	288	96	-67	720	508	-29
Saskatoon			934	578	-38	324	1,368	322	1,258	1,946	55
Sherbrooke			251	150	-40	432	360	-17	683	510	-25
Thunder Bay			165	150	-9	0	144	##	165	294	78
Toronto			5,400	5,394	0	34,464	23,652	-31	39,864	29,046	-27
Trois-Rivières			142	135	-5	528	24	-95	670	159	-76
Vancouver			4,332	4,821	11	20,952	19,956	-5	25,284	24,777	-2
Victoria			1,027	869	-15	3,840	6,168	61	4,867	7,037	45
Windsor			564	564	-	288	780	171	852	1,344	58
Winnipeg			1,797	2,100	17	5,688	5,760	1	7,485	7,860	5

Data based on 2016 Census Definitions.

Source: Market Analysis Centre, CMHC

## not calculable / extreme value

SOURCE Canada Mortgage and Housing Corporation

Angelina Ritacco, Media Relations, CMHC, 416-218-3320, [email protected]

Related Links

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