Housing starts in Canadian cities saw double-digit growth between April and May, with the bulk the activity coming from the condo sector. On Monday, the Canada Mortgage Housing Corporation reported that the seasonally adjusted annual rate (SAAR) for housing starts across Canada was 201,705 in May, up from 183,329 units in April.
Urban starts rose to a SAAR of 185,235 units last month, a 10.8 per cent from April. The multi-unit market counted 126,367 urban starts, a 16.9 per cent monthly increase, while urban starts for single-detached homes stayed saw little change month-to-month with a SAAR of 58,868 starts in May.
The Prairies and British Columbia saw a decline in urban housing starts between April and May. However, the decreases were offset by gains in other parts of the country. The SAAR for housings starts in Ontario’s urban centres rose from 61,666 in April to 81,535 in May, an increase of 32.2 per cent.
In the Toronto region, the SAAR rose from 38,731 in April to 58,351 in May.
There was also strong activity in Quebec, where urban housing starts rose 25 per cent to 29,448 units in May and Atlantic Canada, which recorded 9,584 starts last month, up an astonishing 152 per cent from its April tally of 3,806.
“Despite month-to-month variation in multiple starts, CMHC expects builders will continue to focus on managing inventory of completed but unsold units — inventory that is still above historical average,” said Bob Dugan, CMHC’s Chief Economist.
“CMHC also forecasts slight moderation in housing starts in 2015 and 2016, reflecting a slowdown in housing market activity in oil-producing provinces that will partly be offset by increased activity in provinces that are seeing the positive impacts of low oil prices.”
The CMHC’s trend measure, which takes into account the six-month moving average of the monthly SAAR of housing starts, also increased nation-wide. In May, the country saw 181,231 starts compared to 179,524 in April.
In the Toronto Census Metropolitan Area (CMA), starts trended at 38,355 units in May compared to 32,614 in April.
“Housing starts trended at their highest level in over two years in May. Building activity was strongest in the 905 areas, with condominium apartment starts leading the way.” said Dana Senagama, CMHC’s Principal of Market Analysis for the GTA.
Senagama also noted that land scarcity and high prices are pushing more builders into the suburbs, which have become denser as they take on more multi-unit projects.