The Canada Mortgage and Housing Corporation (CMHC) released its housing starts figures for February 2017, announcing that new home construction trended upwards with help from Ontario.
Last month, Canada was on pace to hit 204,669 units this year. In January, CMHC was forecasting 200,255. The trend is a six month moving average of seasonally adjusted annual rates (SAAR).
“This winter has seen Canada’s national housing starts trend upward, supported mostly by increased construction of homes in Ontario,” says Bob Dugan, CMHC Chief Economist. “New single detached home construction in Ontario is reaching levels not seen in the province since July 2008 — offsetting recent slowdowns in British Columbia.”
In Toronto, the resale supply continues to remain low, which is causing demand to spillover into the new home market, especially for low-rise homes. Construction of single detached homes in February was higher than it’s been for more than 10 years, with 790 starts. There was however a dip in multi-unit starts. While single detached starts soared in Toronto, overall housing starts dropped 25% compared to the same period last year, with a total of 2,541 units.
With prices on the rise in Toronto and surrounding areas, places like St. Catharines are seeing an increase in demand and construction. Housing starts were the highest they’ve been since 1991 in St. Catharines, with one-third of the units being townhomes and the other two-thirds being singles.
Multi-unit starts went up in Montreal too, mostly due to the commencement of some large projects in the Montreal-Griffintown sector. There are now nearly 3,000 apartment units under construction in Montreal. Is it possible that some GTA residents are turning to Montreal for more affordable housing?
Looking out west, there was an unexpected surge in Edmonton where multi-unit construction more than doubled! The completed and unsold inventory has been sitting at record highs since the beginning of 2016, so this jump in apartment starts is unusual. In Victoria, single starts went up in the West Shore area. This new construction is supported by low inventory levels and strong migration.
The standalone monthly SAAR for all of Canada was 210,207 units, up slightly from January’s 208,934. Urban starts went up 0.9% to 193,035 units, with multi-unit starts dropping 4.7% to 121,164 and single starts increasing 12.1% to 71,871. Rural starts are estimated at 17,172 units.
Overall, it’s not that surprising to see a surge in single detached starts; they’ve been in high demand for years and the inventory is running low. When a new detached project opens, buyers are flocking to the sales centres. We’re seeing projects and phases sell out in a single day or weekend. What will the busy spring market bring?