National housing starts trend drops in September, but increases in Toronto
By Newinhomes on Oct 10, 2018
The Canada Mortgage and Housing Corporation released its monthly housing starts figures for September 2018, reporting a trend decrease.
Last month, national housing starts trended at 207,768 units, down slightly from the 213,966 in August 2018. The trend is a six month moving average of seasonally adjusted annual rates (SAAR).
“The national trend in housing starts stood at a 19-month low in September, following declines in four of the last five months,” explains Bob Dugan, CMHC’s chief economist. “The slowdown in the pace of new residential construction activity in recent months is a result of both lower single-detached and multi-starts activity and brings new residential construction closer to its long run average from the elevated levels registered in 2017.”
The standalone monthly SAAR for September 2018 was 188,683 units, down from 198,843 in August. The SAAR of urban starts fell 5.9% to 175,653 units, with multiple-starts dropping 8.9% to 122,656 and detached starts jumping 2% to 52,997.
In Toronto, housing starts trended higher thanks to multiples. Detached starts dropped. Due to relative affordability, construction of semi-detached homes picked up quite a bit, recording the most for the month since September 2004. Since new detached homes continue to be so expensive, more buyers are considering semis, townhomes, and condos.
In St. Catharines-Niagara, housing starts trended higher for the first time in four months, but detached starts still dropped to its lowest monthly level in seven years. CMHC says apartment units accounted for the increase in starts. With higher borrowing rates and a more balanced resale market, sales of new detached homes in St. Catharines-Niagara are slowing.
Another area of Ontario where detached starts slowed was Brantford, though this was the first time starts has slowed since January 2018. It’s important to note that while new construction slowed in September, Brantford has already surpassed the annual totals of detached home starts for each of the last 10 years.
As new home sales in the Greater Toronto Area remain low and places like St. Catharines-Niagara and Brantford hit peaks for detached home construction, it seems like housing starts in our part of the country will remain low for the rest of the year.
