The Canada Mortgage and Housing Corporation (CMHC) released its monthly housing starts data for March 2017, announcing that Canadian housing starts are at their highest level since 2007. The trend is a six month moving average of seasonally adjusted annual rates (SAAR).
In Canada, starts trended at 211,342 units last month, compared to 205,521 in February 2017. “March housing starts were at their highest level since September 2007, pushing the trend in housing starts upward for a third consecutive month,” says Bob Dugan, CMHC’s Chief Economist. “Stronger residential construction at the national level is reflected by a rising trend in single-detached and multi-unit starts in Ontario and continued growth of new rental apartments in Québec.”
The standalone monthly SAAR was 253,720, up from 214,253 in February. The SAAR of urban starts went up 20.2% to 235,674, with multiple urban starts increasing 30.2% to 160,989 and single detached starts going up by 3.1% to 74,685. Rural starts are estimated around 18,046 units.
Housing starts trended higher in Toronto Census Metropolitan Area (CMA) thanks to a strong increase in apartment starts (SAAR). Since last summer, single detached housing starts has trended higher, partially due to the tight rental and resale supply. Many buyers are turning to the new home market (though the new low-rise supply is also low).
In Ontario, single detached starts increased 22% compared to the same period last year. Before everyone starts sounding the overbuilding alarm bells, keep in mind that once all the housing types are taken into consideration, housing starts in Ontario actually fell 4%. The same pattern was seen in Toronto CMA where singles construction went up 12% but overall starts dropped 8%.
With prices rising in Toronto and Hamilton, more buyers are beginning to turn to St. Catharines for more affordable new home options. St. Catharines’ resale supply is also low, but there is plenty of land for single detached development. As sales increase, expect prices in St. Catharines to surge; it’s already happening.
Now that the busy spring season is here and there are many new openings and releases scheduled, it looks like the construction industry won’t be slowing down anytime soon.