The Canada Mortgage and Housing Corporation released its monthly housing starts results for July 2018, reporting a downwards trend.
Canadian housing starts trended at 219,988 units in July, down from 221,738 in June 2018. The trend is a six month moving average of seasonally adjusted annual rates (SAAR).
“The national trend in housing starts decreased in July, reflecting a decline in the SAAR of multi-unit dwellings in urban centres from the near-historical high registered in June,” explains Bob Dugan, CMHC’s chief economist. “Despite decreasing in July, the trend remains well-above historical averages, reflecting elevated levels of multi-unit starts in most major markets that has more-than-offset declining single starts.”
In Toronto CMA, single-detached starts trended lower while multi-unit starts increased. High prices in the new low-rise market continue to push buyers to the relatively affordable new condo market. Condo starts were the highest they’ve been for the month since 2005. The majority of the condo starts were in the City of Toronto, approximately 60% share. 19% of the condo starts were in Mississauga, 11% in Vaughan, and 10% in Oakville.
Housing starts in Oshawa trended lower with detached homes and multi-unit dwellings. July saw the lowest number of single starts for the month since 1992. One reason for this is that the number of units under construction in Oshawa right now has hit a 25-year high, which is slowing the pace of new openings.
One area that is thriving on the detached home front is Peterborough. There were many sales and starts in 2017, and it’s been a strong 2018 so far for detached home construction. According to CMHC, the demand is fuelled by relative affordability compared to other major urban areas in Ontario and the Greater Toronto Area.
With the average price of a new single-family home well above $1 million in the GTA, it makes sense that places on the outskirts of the region are seeing an influx in sales and construction.
The standalone monthly SAAR for July 2018 was 206,314 units, down from 246,200 in June. The SAAR of urban starts dropped 16.2% to 140,093 units, with multiple starts falling 20.3% to 136,231 and detached starts sliding 3.6% to 53,862. Rural starts are estimated at 16,221 units.